Must OECD countries fall into “market-driven fiscal crises”?
“The legacy of the Great Recession for fiscal policy is staggering,” Paul Posner of George Mason University and Jón Blöndal of the Organization for Economic Coordination and Development write in the current issue of Governance (25.1, January 2012). Some OECD countries have already fallen into devastating “market-driven fiscal crises.” Are the rest doomed to follow? Not necessarily, Posner and Blöndal argue. Skilled political leaders can achieve fiscal sacrifice in ways that promote electability. The conventional wisdom — that democratic systems are incapable of exercising fiscal self-restraint — is overdrawn. Open access to this article. Photo: Paul Posner speaks at Governance roundtable on financial crisis.