THE POLITICAL-ECONOMY OF FISCAL CONSOLIDATIONS

In the context of recent research in political economy, this paper add resses the policy problem of fiscal consolidation in terms of three ty pes of issues: i) the macroeconomic effects of alternative strategies to consolidate; ii) the institutional setups conducive to a consolidat ion; and iii) the best strategy for implementing a consolidation in or der to maximize its political feasibility. One methodological feature of this survey is an emphasis on policy feasibility. One methodologica l feature of this survey is an emphasis on policy issues in order to b ridge the gap between the level of abstraction of politico-economic mo dels of fiscal policy and the issues faced by a policymaker when attem pting a fiscal consolidation.