Public Debt and Public Policy: On the Transformation of the Swedish Political Economy
Since the 1970s, public debt in developed democracies has been increasing to an unprecedented extent in peacetime. Fiscal constraints limit the policy discretion of governments. While a regime of fiscal austerity has emerged in many countries, the trend in Swedish public finance was substantially different. The Swedish political-economic system was shattered and deeply transformed by two devastating fiscal crises but has recovered in the last decade to regularly achieve budget surpluses. Despite - or precisely because of - this favorable budgetary situation, transformation of the Swedish political economy continues. This research project examines the development of public finance and investigates the causes and consequences of related institutional change in the Swedish political economy. Project duration: October 2009 to March 2013.