101 Proposals to reform the Stability and Growth Pact. Why so many? A Survey

background of the authors and the type of proposals they make. The database obtained in this
way lends itself to basic multivariate statistical analysis, the results of which form the basis
for our interpretative work.

In terms of the economic content of the proposals, two variables are crucial: (i) the main
economic policy objective of the SGP advocated by the authors, and (ii) the suggested
modification of the current institutional setup. Concerning the policy objective, we distinguish
between seven different categories: (1) short-term stabilisation, (2) short-term budgetary
discipline, (3) long-run sustainability, (4) optimal policy mix, (5) economic growth, (6)
various combinations of policy aims, and finally as a separate entity those proposals arguing
that (7) the SGP serves no purpose, and thus that a market solution is superior to the system of
administrative surveillance. Of course, there are trade-offs and/or complementarities across
these main goals. However, for the purpose of our analysis we have identified what we view
as the main aim.

With regard to the suggested modifications of the SGP, we choose six different categories for
classifying the proposals. These categories are ranked according to the degree of modification
ranging from (0) for ‘no modification’ to (5) for ‘abolish the SGP and go for alternatives’.

The time dimension of each proposal is captured by the distance measured in months between
the date of publication of the proposal and November 2003. As mentioned above, 25
November 2003 formally marks the apex of the SGP crisis when the Council of the European
Union decided not to implement the provisions of the SGP recommended by the Commission
vis-à-vis France and Germany.

A detailed description of the variables characterising each proposal is provided in Table 1.
The classification of the 101 reform proposals based on our characterising variables can be
found in Annex 2.

The main aim of the quantitative analysis of the set of 101 proposals is to examine the degree
of consensus or the lack of it among professional economists concerning the SGP and its fate.
Several questions spring to mind. How dispersed are the views about the objectives of the
SGP? Have views changed over time? How important are welfare considerations vis-à-vis
considerations of political economy? Are there significant differences between the proposals
of academic and non-academic economists? Do views differ between contributions from euro-
area countries and non-euro-area countries? Does the size of the proposal-maker’s country
matter?

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