Premium
The Stability Pact – Rationales, Problems, Alternatives
Author(s) -
Lindbeck Assar,
Niepelt Dirk
Publication year - 2006
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.2006.00350.x
Subject(s) - pact , incentive , context (archaeology) , sanctions , spillover effect , enforcement , perspective (graphical) , stability and growth pact , economics , public economics , international economics , macroeconomics , political science , microeconomics , computer science , law , member states , european union , paleontology , artificial intelligence , biology
SUMMARY We analyze economic rationales for, and possible alternatives to, the Stability and Growth Pact (SGP). We identify various cross‐country spillover effects and domestic policy failures as potential rationales. The two sets of problems suggest different corrective measures, and different measures than those applied in the context of the SGP. We contrast the ‘legalistic’ perspective adopted in the Pact with a more incentive‐based approach and discuss how the legalistic perspective gives rise to enforcement problems in connection with the implementation of the SGP's sanctions.