Open research questions in Fiscal Policies and Political Economy

What the literature leaves open

• The study faces the challenge of modeling budgetary trade-offs in a context where policymakers have limited control over tax revenues and are subject to a constitutional debt brake. It also needs to account for the complexity of party politics in shaping budgetary priorities under fiscal pressure. Additionally, the analysis must address the issue of interdependence between different policy areas in the budget.

  First things first? Austerity, political parties and the composition of public budgets in the German states · 2026 · DOI

• There is a lack of research on budgetary trade-offs between policy sectors in the German states. Prior studies have not fully explored the role of political parties in shaping budgetary priorities under fiscal pressure.

  First things first? Austerity, political parties and the composition of public budgets in the German states · 2026 · DOI

• The study identifies a gap in the understanding of the impact of U.S. presidents on federal tax receipts. The research notes that prior work has not fully examined the role of administrative discretion in shaping federal tax receipts. The study aims to fill this gap by investigating the relationship between presidential administrations and federal tax receipts.

  Do US presidents leave fiscal fingerprints? the power of the executive branch through a century of tax data · 2026 · DOI

• Further research could examine the effects of elections on other economic outcomes - Further research could examine the long-term effects of elections on household consumption - Further research could examine the effects of elections on household consumption in other countries - Further research could examine the role of political parties in shaping household consumption - Further research could examine the effects of different types of elections on household consumption

  Electoral cycles and consumption in India · 2026 · DOI

• The direct consequences of political manipulation of policy on household behavior remain less explored. Little is known about how election periods affect private consumption, the most immediate and politically salient dimension of economic welfare. There is surprisingly little evidence on how elections translate into changes in household economic behavior.

  Electoral cycles and consumption in India · 2026 · DOI

• What remains to be examined is the potential effect of the voice option, which in A. The dynamics of the internal decision-making process remain to be analyzed.

  Organization Theory and Fiscal Economics: Society, State, and Public Debt · 1986 · DOI

• Future research can apply the study's methodology to other municipal corporations to analyze their expenditure patterns. Future research can explore the impact of different factors on municipal expenditure patterns.

  Predicting the Path of Progress: A Trend and Forecast Analysis of PMC Expenditure · 2026 · DOI

• The study identifies a gap in the analysis of municipal expenditure patterns in the context of urban growth and development. The study highlights the need for more balanced investment across sectors in future planning.

  Predicting the Path of Progress: A Trend and Forecast Analysis of PMC Expenditure · 2026 · DOI

• The prevailing narrative in European economic debate suggests that fiscal discipline is necessary for debt sustainability, but the analysis reveals a paradox. The paper identifies a gap in the understanding of the relationship between fiscal policies and debt dynamics.

  The Paradox of Austerity · 2026 · DOI

• literature, namely, neoclassical, Ricardian, and Keynesian theories the research adopted a Keynesian framework. Methodologically, the study employed a Vector Error Correction Model (VECM) to analyze long-run causality. The significance of key model statistics (Wald and error correction term coefficients) confirmed a unidirectional causal relationship from budget deficits to the human development index, a finding the study discovered to be consistent with the Keynesian theory. The study concluded that for budget planning to be an effective fiscal policy instrument, the long-run and more permanent effects of deficits on human development must be a primary consideration. Monogbe and Okah (2017) examined the effect of deficit financing on Nigeria’s economic development within the context of theoretical debates between Keynesian, neoclassical, schools. The study is prompted by the paradox of Nigeria’s and Ricardian 2 https://journals.e-palli.com/home/index.php/jgesd Page J. Glob. Econ. Sustain. Dev. 2(1) 1-9, 2026 high debt accumulation not translating into tangible development outcomes. Employing an error correction model and Granger causality tests for the period 1981 to 2015, the analysis revealed that the external debt exhibited a statistically significant positive relationship with economic development, albeit with a minimal coefficient (0.0173). Conversely, neither domestic debt nor the budget deficit itself demonstrates a causal link to development. The study, therefore, concluded that deficit financing, specifically through external debt, can act as a vital developmental stimulus, affirming the Keynesian postulate. The study recommended the prudent and coordinated management of borrowed funds, ensuring they are invested in capital and productive sectors to foster sustainable economic development. Employing a dual-methodological framework, Udeaja and Akanni (2024) examined the nexus between fiscal deficits and human development in Nigeria from 1990 to 2021. Their application of an ARDL model found no statistically significant linear relationship in the short run or the long run. In contrast, a multivariate adaptive regression spline analysis uncovered a critical nonlinear threshold: deficits enhanced human development below 1.34% of GDP but constrained it beyond that point, which suggested fiscal sustainability constraints. They believed that this negative effect could be reversed with robust economic capacity. The research emphasized electrification as a pivotal determinant of development and advocated for a policy framework of targeted deficit spending in priority sectors, fiscal rule enforcement, and sustained investment in infrastructure to promote sustainable human development. Suotor et al (2025) adopted key variables such as the human development index (a proxy for economic development), broad money supply, deficit budget, domestic debt, and external debt as they investigated the relationship between deficit financing and economic development in Nigeria from 1980 to 2024. They employed cointegration and error correction analysis. Their findings indicated that all the variables are integrated of order 1(0). The application of an Error Correction Mechanism (ECM) further revealed a significant short-run relationship and quantified the rate of adjustment back to the long-run equilibrium. The study concludes that budget deficits, by negatively correlating with the HDI, can act as a constraint on government expenditure. Consequently, the authors recommended a comprehensive fiscal approach, emphasizing prudent management of domestic and external debt, to safeguard Nigeria’s economic well-being. However, it should be noted that if all variables are integrated to order zero, I(0), the problem the ECM is designed to solve simply does not exist. This is because the entire theoretical foundation of the ECM is built on the concept of cointegration, a long-run equilibrium relationship between variables that are non-stationary (I(1)) but move together over time. Hence, using ECM to model I(0) variables is inappropriate. MATERIAL AND METHODS The study adopts the ex post research design. This implies analyzing and understanding the consequences of a particular event after it has occurred. It is fitting that the study seeks to analyze the effect of fiscal deficit financing strategies on human development in Nigeria.

  Fiscal Deficit Financing Strategies and Human Development Outcomes in Nigeria · 2026 · DOI

• The study identifies a gap in the comparative analysis of fiscal performance of Indian states. The study aims to fill this gap by comparing the fiscal performance of Odisha and West Bengal.

  FISCAL MANAGEMENT AND FISCAL SUSTAINABILITY: A COMPARATIVE STUDY OF ODISHA AND WEST BENGAL · 2026 · DOI

• Future research should investigate the impact of fiscal seasonality on public sector efficiency in other contexts. Future research should explore the use of other techniques, such as stochastic frontier analysis, to analyze public sector efficiency.

  EFICIÊNCIA DA GESTÃO POR RESULTADOS: · 2026 · DOI

• The study identifies a gap in the understanding of the impact of fiscal seasonality on public sector efficiency. The study notes that prior research has not fully considered the impact of fiscal seasonality on the effectiveness of incentive systems.

  EFICIÊNCIA DA GESTÃO POR RESULTADOS: · 2026 · DOI

• The paper suggests that future research should focus on developing more sustainable economic systems. It highlights the need for a more critical analysis of the current economic system and its limitations.

  Debt · 2026 · DOI

• The paper identifies a gap in the current understanding of debt and its effects on society. It highlights the need for a more radical approach to debt forgiveness and resource management.

  Debt · 2026 · DOI

• The MINT countries face substantial challenges in the management of their fiscal resources to support growth-related aspirations. The MINT countries need to manage their fiscal resources to support growth-related aspirations. Fiscal sustainability practices are necessary for the MINT countries.

  Fiscal Space, Public Debt Sustainability and Economic Growth: Empirical Inference from the MINT Countries · 2026 · DOI

• The study identifies a gap in the literature on the effect of fiscal space and public debt on economic growth in the MINT countries. The study aims to fill this gap by providing valuable insights into the complex relationships between public debt, fiscal deficit, and economic growth in the MINT countries.

  Fiscal Space, Public Debt Sustainability and Economic Growth: Empirical Inference from the MINT Countries · 2026 · DOI

• The PVAR model is limited in its ability to account for heterogeneity and cross-sectional dependence. The model does not consider potential cross-sectional dependencies among panel members.

  Fiscal shocks and subnational government finances: evidence from Indian states · 2026 · DOI

• The literature on assessing the impact of fiscal shocks is primarily based on national level data. There is a need to study the impact of fiscal shocks on subnational finances.

  Fiscal shocks and subnational government finances: evidence from Indian states · 2026 · DOI

• The topic of green transition and public debt is underexplored among scholars, particularly in the context of EU countries. The study fills this gap by examining the impact of green transitions on public debt in 27 European Union countries.

  Does Green Transition Harm EU Public Debt? · 2026 · DOI

• Future research could explore the effects of the green transition using total debt indicators, extend the scope to include non-EU countries, and use longer time periods to achieve a more comprehensive understanding.

  Does Green Transition Harm EU Public Debt? · 2026 · DOI

• The ARDL model has limited applicability when the data series are integrated of order I(2).

  Fiscal footprints in post-reform India: unraveling the nexus between government expenditure and national income · 2026 · DOI

• Future research can build on the study's findings and explore the relationship between government expenditure and national income in other countries. Future research can use different methodologies and techniques to validate the study's results.

  Fiscal footprints in post-reform India: unraveling the nexus between government expenditure and national income · 2026 · DOI

• The paper notes that Vietnam is reforming its financial regulations to adapt to economic development and global integration. The authors highlight the importance of understanding how legal structures influence public finance policies. The paper aims to provide a foundation for further research on financial law in developing economies.

  THE BASIC OF PUBLIC FINANCES IN THE REGULATION OF HUNGARY AND VIETNAM COMPARATIVE ANALYSIS · 2026 · DOI

• There is a need for a comparative analysis of public finance law in Hungary and Vietnam. The paper aims to fill this gap by providing an overview of the main fundamental aspects of public finance law in both countries.

  THE BASIC OF PUBLIC FINANCES IN THE REGULATION OF HUNGARY AND VIETNAM COMPARATIVE ANALYSIS · 2026 · DOI

Most-cited papers in Fiscal Policies and Political Economy

• Are Government Bonds Net Wealth? · Journal of Political Economy · 1974 · 3,079 citations
• On the Determination of the Public Debt · Journal of Political Economy · 1979 · 1,658 citations
• Income distribution, political instability, and investment · European Economic Review · 1996 · 1,546 citations
• Debt with Potential Repudiation: Theoretical and Empirical Analysis · The Review of Economic Studies · 1981 · 1,491 citations
• The Behavior of U. S. Public Debt and Deficits · The Quarterly Journal of Economics · 1998 · 1,071 citations
• A Positive Theory of Fiscal Deficits and Government Debt · The Review of Economic Studies · 1990 · 970 citations
• Budget spillovers and fiscal policy interdependence · Journal of Public Economics · 1993 · 809 citations
• Why a Stubborn Conservative would Run a Deficit: Policy with Time- Inconsistent Preferences · The Quarterly Journal of Economics · 1989 · 733 citations
• State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics · Journal of Political Economy · 1994 · 689 citations
• Political budget cycles: Do they differ across countries and why? · Journal of Public Economics · 2006 · 654 citations

Most recent work

• The Demand for Government Debt · Management Science · 2026
• Fiscal drag in theory and in practice: A European perspective · European Economic Review · 2026
• Revisiting the Interest Rate Effects of Federal Debt · The Review of Economics and Statistics · 2026
• Generationengerechte (Staats-)Schulden: Replik und Erwiderung · Wirtschaftsdienst · 2026
• Is fiscal deficit stimulus or constraint for economic growth in India? Empirical evidence using asymmetric and thresholds approaches · Economic Change and Restructuring · 2026
• Risk-based predictive modelling for audit verification: evidence from EU-funded programmes · Quality & Quantity · 2026
• First things first? Austerity, political parties and the composition of public budgets in the German states · Public Choice · 2026
• Inflation, War Bonds, and Voter Backlash in the 1950s · The Review of Economics and Statistics · 2026
• Political budget cycles in federal systems: The case of India · European Journal of Political Economy · 2026
• The Limits of Public Support for Fiscal Consolidation: Survey Evidence From Great Britain · Comparative Political Studies · 2026

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