Full text of the paper:
Collected Papers of the Faculty of Law, University of Novi Sad
2017, vol. 51, No. 2, pp. 417–432
Language of the paper: English
Overview paper
udk: 336.22
doi: 10.5937/zrpfns51-13798
Author:
Marija Vuković, Ph. D., Professional Studies Professor
Univerzitet u Novom Sadu
Novi Sad School of Business
vlahmari@uns.ac.rs
Abstract:
This paper seeks basic economic and political causes of instability and rising fiscal deficit. Economic factors that may cause the appearance and increase in the fiscal deficit are: growth of current public spending, launching public investments, tax cuts and weakening financial discipline. The government’s policy that is a result of its coalition agreement, everywhere in the world, is the primary factor that causes the formation and growth of the fiscal deficit. The aim is to show that the politically unstable countries with weak institutions are often vulnerable to fiscal shocks, which, in turn, lead to the greater instability in the fiscal deficit.
Keywords:
tax cuts; fiscal illusion; intergenerational redistribution of the burden of public debt; spatial separation of interests; budgetary institutions.