Abstract
A ‘structural gap’ in public finance refers to a scenario whereby public expenditure grows faster than revenues over the long term. In such a case, public finance becomes increasingly unsustainable. A structural gap does not necessarily mean that public expenditure is too high or that tax revenues are too low. All a gap indicates is that expenditure is greater than can be sustained by income over an extended period of time. The term ‘structural gap’ is therefore value-free and does not reflect a particular political philosophy, whether Libertarian, Neo-Liberal or Collectivist. Instead, it reflects the state of the public finances in objective accounting terms.
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© 2004 Stephen J. Bailey
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Bailey, S.J. (2004). Structural Gaps in Public Finance. In: Strategic Public Finance. Palgrave, London. https://doi.org/10.1007/978-1-4039-4394-1_7
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DOI: https://doi.org/10.1007/978-1-4039-4394-1_7
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