FRANCO OSCULATI e CATERINA PERUGINI

Democrazie in deficit  

N. 3/1985

Summary — The continuous expansion of the public sector’s borders ha awakened everywhere in the world the interests of a lot of researchers, even not specialist in public sector’s economy, in the internal logics of the State and the other public bodies. These logics are produced by the increasing relevance that the economic policy assumed for the maintenance of consent, not only electoral, from government forces.

Thus, theories from the traditional financial studies, Italian especially, are recently resumed, and the modern tools of the econometric analysis are tried to be applied on not completely new ipothesis and intuitions.

The interest in this kind of research has been then fed further on by the observation of the increase of public deficit and public indebtedness in almost all the capitalist and democratic countries.

In this paper we purpose to make a review of the main arguments about the public sector’s propensity towards expansion arised from the democratic mechanism of public choices constitution.

In the first section we 1ay stress on the common phenomenon of the increase of public budgets and of the related expansion of financial liabilities of the State.

Then, we examine the problem of inefficiency of the public sector. One of most important cause of this inefficiency is generally attributed to the bureaucratic phenomenon. At the modern bureaucracy, also in linkwork with the "public choice" theory’s results, we will devote particular attention to check some assumptions that seem to be criticizable.

The expansion of public budgets can then be related to the scarcity of information and sensitivity of voters about the public expenditures costs. This is the argument of fiscal illusion, that we discuss in section 6 and 7.

The allowance that government authorities have in respect of expenditures is produced by the fact that the benefits of them are generally close and tangible, while the costs of expenditures are extensible and uncertain.

These arguments are debated in sections 8 through 11, in which we also examine the opportunity to introduce in the Italian system two institutional measures in order to make the maintenance of the financial rigour easier. The first measure is the introduction of a constitutional constraint for budget’s deficit, the second one concerns the restitution to local governments of the financial responsibility to collect taxes.