Combining autocracy and majority voting: the canonical succession rules of the Latin Church

The autocratic turn of the Latin Church in the XI-XIII century, a reaction to the secular power interferences, concentrated the decision-making power in the hands of the top hierarchy, and finally in the hands of the pope. A fundamental step was the change and the constitutionalisation of the procedures for leadership replacement, which were open successions where the contest for power was governed by elections. The autocratic reform limited the active electorate to the clergy only and gradually substituted the episcopal elections by the pope’s direct appointment. Besides, the voting rules changed from unanimity to the dual principle of maioritas et sanioritas (where the majority was identified with the greater part by number and wisdom) and finally to the numerical rule of qualified majority. This evolution aimed at preserving the elections from external interferences and at eliminating the elements of arbitrariness. The most important succession, the papal election, was protected by institutionalising a selectorate and its decision-making rules. The selectorate and the elections did not insert accountability and representation mechanisms but only protected the quality of the autocratic leadership and its autonomy.Theocracies, Autocracy, Succession rules

The domestic stability pact in Italy: a rule for discipline?

The 1999-2006 versions of the Italian Domestic Stability Pact had many shortcomings and a modest impact with respect to the aim of aligning the fiscal behaviour of sub-national government units with the national commitments under the European Stability and Growth Pact. The Domestic Pact was revised in 2007 and 2008 to tighten the monitoring and sanctions framework and prevent some inefficient behaviour. However, some undesirable features still mar the new regime: no coordination exists between the Domestic Pact and the debt and tax constraints applied to local governments; a clear definition of the contribution of sub-national governments to aggregate compliance with the external rule is still lacking; flexibility has been introduced by means of an artificial reference budget balance; side effects on resource redistribution are ignored; and monitoring and sanctioning remain weak. Remedies for the above shortcomings can possibly be found in the domestic pacts of the other EMU countries. Most of all, the Domestic Pact should be adjusted to the specific characteristics of fiscal decentralization in Italy, where a large fiscal gap exists, revenue autonomy is constrained and a large share of the responsibility for spending is rigid and politically sensitive.Domestic Stability Pact, fiscal federalism

Aid Financing of Global Public Goods: an Update

The paper compares different aggregates of aid financed global public goods and detects the presence, for the period 1995-2006, of the substitution effect between these aggregates and traditional aid that was found by former studies for earlier periods. A second focus of the paper is on the differences in the importance that donors attach to the various types of global public goods, trying to detect regular patterns in their choices of financing. Statistical regularities, representative of common historical, social, cultural factors, for groups of countries (Anglo-Saxon, Northern European and Central European) give rise to the existence of a certain clusterized homogeneity in global public goods financing. Potential explanatory variables are examined in a panel analysis, which reveals the dominance of the donors’ wealth, preferences for public goods and public finance constraints in the decision of aid funding of global public goods. Finally, there is evidence that some global public goods with weakest-link technologies have become increasingly important at the global level. The increase in their financing through aid flows could be explained by the rich countries’ fear of an insufficient provision by poor countries, which, increasingly, cannot afford to pay for them: rich countries are therefore stepping in to avoid sub-optimal levels of provision, as already foreseen by Sandler (1998).Foreign aid, Global public goods

The decision-making procedures for the European Union’s finances in the Constitutional debate

The paper accounts for the veto player system that dominates the decisions on the medium-term expenditure ceilings (the Financial Perspectives) and on the revenues (the Own Resources Decision) and for the joint decision-making mode that has been gradually introduced for the European Union’s annual budgetary process. This two-tier system has been confirmed by the new Constitutional Treaty, which does not substantially innovate the intergovernmental procedures governing the medium term programming and financing. With respect to the annual budgetary process, the Constitutional Treaty institutionalises the rules which have been necessitated by practical constraints outside the Treaty machinery: the new process is modelled on a modified version of legislative Codecision and provides for incentives to the parties to agree on the budget draft decided by the Conciliation Committee

Budgeting versus implementing fiscal policy:the Italian case

The budgeting process has been recently reformed in Italy (L. 196/2009) in order to improve control of budget and transparency in the provision of clear information on government fiscal policy. Indeed, the general government final expenditures often deviate significantly from the initial forecasted amounts. Therefore, although the initial budget is often formulated in contractionary stance compared with the previous year’s final account, the final outcome turns out to be expansionary. As a consequence, confidence in the reliability of expenditure estimates in the initial budget and in the value of the initial budget as an indicator of the stance of fiscal policy have been undermined. Using real-time data for Italy, reported in the Relazione Previsionale e Programmatica (RPP) and in the Relazione Unificata sull’Economia e la Finanza Pubblica (RUEF), we explore fiscal plans and their implementation for GDP and general government aggregated and disaggregated items of revenue, expenditure and budget balance over the period 1998-2009. Both reports are employed with the aim of measuring the budgetary policy implementation error, following the methodology of Beetsma et al. (2009). We focus on the first year of the fiscal plans because budgetary slippages mainly occur in this year (Balassone et al. 2010). The main findings suggest that implemented budgetary adjustment falls systematically short of planned adjustment for GDP, for primary balance and overall balance. Actually, the main determinants of the implementation error of both primary and overall balance are the expenditures, in particular, the capital expenditures. Moreover, it seems that errors in macroeconomic forecasts cannot be considered the driving force of the budgetary slippages. Our results are in line with the strand of literature (von Hagen 1992; von Hagen and Harden 1994; Alesina and Perotti 1999; Tanaka 2003) according to which credible plans are the conditio sine qua non for healthy budget outcomes and resorting fiscal transparency and accountability. To improve public budgeting in Italy, we deem necessary a renewed commitment by policy makers in term of planning and control of public expenditures.fiscal plans; real-time data; implementation; budget process; expenditure and revenue; Italy

Public finance, fiscal rules and public–private partnerships. Lessons for Post-COVID-19 investment plans

We explore the distribution of public-private partnerships (PPPs) among the European Union countries, with a special focus on fiscal rules and budgetary constraints while controlling for empirically identified drivers. While offering the opportunity to increase innovation and efficiency in the public sector infrastructure, PPPs allow governments to relax their budget and borrowing constraints. We find that the state of public finances influences the government's choice of PPPs and makes them more appealing for reasons other than efficiency. Stringent numerical rules on the budget balance also foster government's opportunism in the choice of PPPs. On the other hand, high levels of public debt increase the country risk, and discourage private investors from PPP contracts. The results highlight the importance of restoring PPP investment choices based on efficiency criteria and adapt fiscal rules to shield public investment while stabilizing private expectations by means of credible trajectories of debt reduction. The findings contribute to the debate on the role of fiscal rules in fiscal policy and of PPPs in infrastructure financing

Aid Financing of Global Public Goods: an Update

The paper compares different aggregates of aid financed global public goods and detects the presence, for the period 1995-2006, of the substitution effect between these aggregates and traditional aid that was found by former studies for earlier periods. A second focus of the paper is on the differences in the importance that donors attach to the various types of global public goods, trying to detect regular patterns in their choices of financing. Statistical regularities, representative of common historical, social, cultural factors, for groups of countries (Anglo-Saxon, Northern European and Central European) give rise to the existence of a certain clusterized homogeneity in global public goods financing. Potential explanatory variables are examined in a panel analysis, which reveals the dominance of the donors’ wealth, preferences for public goods and public finance constraints in the decision of aid funding of global public goods. Finally, there is evidence that some global public goods with weakest-link technologies have become increasingly important at the global level. The increase in their financing through aid flows could be explained by the rich countries’ fear of an insufficient provision by poor countries, which, increasingly, cannot afford to pay for them: rich countries are therefore stepping in to avoid sub-optimal levels of provision, as already foreseen by Sandler (1998)

The domestic stability pact in Italy: a rule for discipline?

The 1999-2006 versions of the Italian Domestic Stability Pact had many shortcomings and a modest impact with respect to the aim of aligning the fiscal behaviour of sub-national government units with the national commitments under the European Stability and Growth Pact. The Domestic Pact was revised in 2007 and 2008 to tighten the monitoring and sanctions framework and prevent some inefficient behaviour. However, some undesirable features still mar the new regime: no coordination exists between the Domestic Pact and the debt and tax constraints applied to local governments; a clear definition of the contribution of sub-national governments to aggregate compliance with the external rule is still lacking; flexibility has been introduced by means of an artificial reference budget balance; side effects on resource redistribution are ignored; and monitoring and sanctioning remain weak. Remedies for the above shortcomings can possibly be found in the domestic pacts of the other EMU countries. Most of all, the Domestic Pact should be adjusted to the specific characteristics of fiscal decentralization in Italy, where a large fiscal gap exists, revenue autonomy is constrained and a large share of the responsibility for spending is rigid and politically sensitive

The Domestic Stability Pact: Assessment of the Italian experience and comparison with the other EMU countries

The 1999-2006 versions of the Italian Domestic Stability Pact had many shortcomings and a modest impact with respect to the aim of aligning the fiscal behaviour of sub-national government units with the national commitments under the European Stability and Growth Pact. The Domestic Pact was revised in 2007 and 2008 to tighten the monitoring and sanctions framework and prevent some inefficient behaviour. However, some undesirable features still mar the new regime: no coordination exists between the Domestic Pact and the debt and tax constraints applied to local governments; a clear definition of the contribution of sub-national governments to aggregate compliance with the external rule is still lacking; flexibility has been introduced by means of an artificial reference budget balance; side effects on resource redistribution are ignored; and monitoring and sanctioning remain weak. Remedies for the above shortcomings can possibly be found in the domestic pacts of the other EMU countries. Most of all, the Domestic Pact should be adjusted to the specific characteristics of fiscal decentralization in Italy, where a large fiscal gap exists, revenue autonomy is constrained and a large share of the responsibility for spending is rigid and politically sensitive

The Domestic Stability Pact: Assessment of the Italian experience and comparison with the other EMU countries

The 1999-2006 versions of the Italian Domestic Stability Pact had many shortcomings and a modest impact with respect to the aim of aligning the fiscal behaviour of sub-national government units with the national commitments under the European Stability and Growth Pact. The Domestic Pact was revised in 2007 and 2008 to tighten the monitoring and sanctions framework and prevent some inefficient behaviour. However, some undesirable features still mar the new regime: no coordination exists between the Domestic Pact and the debt and tax constraints applied to local governments; a clear definition of the contribution of sub-national governments to aggregate compliance with the external rule is still lacking; flexibility has been introduced by means of an artificial reference budget balance; side effects on resource redistribution are ignored; and monitoring and sanctioning remain weak. Remedies for the above shortcomings can possibly be found in the domestic pacts of the other EMU countries. Most of all, the Domestic Pact should be adjusted to the specific characteristics of fiscal decentralization in Italy, where a large fiscal gap exists, revenue autonomy is constrained and a large share of the responsibility for spending is rigid and politically sensitive