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Balanced Budget Rules and Expenditure Limits: Lessons from the US and Australia and Implications for the EU

Published online by Cambridge University Press:  06 March 2019

Mark Humphery-Jenner

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Governments periodically receive accusations of over-spending. These accusations are sometimes warranted. Some commentators propose that strict tax and expenditure limits (TELs) and/or balanced budget requirements (BBRs) may resolve excessive expenditure. Governments can implement TELs and BBRs through constitutional amendments, statutory schemes, or non-binding aspirational goals. They have been proposed as a remedy to allegations of over-spending in some European countries. However, it is not entirely clear if TELs or BBRs are effective or will resolve excess expenditure. I analyze TELs and BBRs as implemented in the United States and Australia. I argue that the Australian model of aspirational TELs and BBRs is beneficial if there is a political will to enforce them. However, if there is no such political will, then statutory (as opposed to constitutional) TELs and BBRs best strike a balance of flexibility and constraint.

Type
Articles
Information
German Law Journal , Volume 13 , Issue 6 , June 2012 , pp. 607 - 636
Copyright
Copyright © 2012 by German Law Journal GbR 

References

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26 I describe these relaxations in this section.Google Scholar

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29 I do not argue that a “pure” limit without amendments would be superior; it is not possible to test this counter-factual. I merely argue that the amendments have created sub-optimal outcomes in some respects.Google Scholar

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