Determination of Public Debt Policy through Political Processes

Abstract

I review recent studies on determination of public debt policy through political processes and propose directions of future research. First, I introduce studies which investigate the relationship between amounts of public debt and fiscal stances in developed countries. In those studies, we can observe various patterns of fiscal stances. The divergence among the countries can be explained by political processes. Second, I review recent studies which analyze how to determine size of government spending, tax revenue, and issuance of public debt through political processes. In one stream, researchers investigate how an intra-generational conflict affects voting on fiscal policy. In another stream, we analyze how an inter-generational conflict does. Lastly, I raise some directions of future research about determination of public debt policy through political processes.