Bulletin n. 2-3/2012 | ||
October 2012-February 2013 | ||
Mark Humphery-Jenner |
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Balanced Budget Rules and Expenditure Limits: Lessons from the US and Australia and Implications for the EU | ||
in German Law Journal , vol. 13, issue 6 , 2012 , 607-636 | ||
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. | ||