Budget deficits and social protection : cyclical government expenditure in the OECD

Abbott, Andrew James and Jones, Philip (2012) Budget deficits and social protection : cyclical government expenditure in the OECD. Economics Letters, 117 (3). pp. 909-911. ISSN 0165-1765

Abstract

Countercyclical government spending offers social protection to the vulnerable when economies move into recession. This paper questions the extent to which governments are able to spend countercyclically and the extent to which social expenditures are likely to be countercyclical. An analysis of public spending in OECD countries (1980–2005) suggests countercyclical social protection is constrained by the limits to public borrowing and the degree of political polarization.