Public Choice

, Volume 129, Issue 3–4, pp 417–434 | Cite as

An experimental analysis of voting in the Stability and Growth Pact in the European Monetary Union

Original Article

Abstract

The Stability and Growth Pact (SGP) in the European Monetary Union shall deter countries from running excessive deficits by the threat of punishment, executed conditional on the outcome of a multistage voting procedure. We examine voting behaviour in an experiment which closely resembles the SGP’s design and find that the SGP enables larger countries to block punishment more often than smaller countries. In addition, we study an institutional modification of the SGP by excluding countries with excessive deficits from voting on other ‘fiscal sinners’. Our findings clearly suggest that this innovation would give the SGP sharper teeth than it actually has in reality.

Keywords

Stability and Growth Pact Experiment Voting Public bad Punishment 

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Copyright information

© Springer Science+Business Media B.V. 2006

Authors and Affiliations

  1. 1.London School of EconomicsLondonUnited Kingdom
  2. 2.Department of EconomicsUniversity of CologneAlbertus-Magnus-PlatzGermany

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