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How have existing fiscal mechanisms (rules and practices) tried to overcome or alleviate a "tragedy of the commons" dilemma Essay Example

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How have existing fiscal mechanisms (rules and practices) tried to overcome or alleviate a "tragedy of the commons" dilemma

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Indeed, evidence from financial bodies such as the Organization of Economic Co-operation and development suggest that make-up of financial adjustment is paramount for fiscal sustainability (Berthélemy & Varoudakis 1996, p12). Consolidations, which heavily rely on, tax cuts and increases in public ventures have been unsustainable while consolidations with structural reforms in their public expenditure reforms have lasting effects and financial growth by extension. Perhaps this is because they have dealt with major types of expenses showing a stronger upward drift. The same results have been confirmed in developing countries as well. The major difference has been that there is better mobilization of tax funds that support consolidation; chances of sustainability greatly increase (Ostrom 2010, P26). After surpassing the fiscal deficit, the amount of government expenses will most likely have an effect on economic growth.A higher level of public expenditure can negatively influence resource distribution and growth through a number of channels. These then directly or indirectly add rigidity to the budget and make it difficult to control or monitor fiscal balance (Berthélemy & Varoudakis 1996, p132). Consequently, they accelerate levels of taxation and occasionally reduce incentives to invest, save, innovate, and take part in the labor market. Huge government expenditures are always aided by intrusive regulations that often trigger private investment and participation. Additionally, when they become bigger, spending programs can sometimes become unfruitful, especially when they are poorly designed due to little government effectiveness or when they give rise to more opportunities for rent-seeking and corruption. Thus, the impact of government spending programs on growth can, therefore. be particularly sensitive, largely depending on the governance quality (Ostrom 2010, P26).Experimental evidence does suggest that make-up of expenditure matters a great deal for growth (Ostrom 2010, P26). Administrative expenditures that enhance quantity and efficiency production factors are deemed as productive since they directly contribute to higher growth. Likewise, expenditures that help enforce the rule of the law, safeguard property rights, and assist transactions can be viewed as productive- although different schools of thought differ regarding the reasonable government expenditure. Conversely,

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