have excluded proposals written in languages other than English as well as reform
recommendations made by economists in government positions and in banking and finance. If
a full count of all such proposals were made, we suspect the number would be closer to a
thousand than to a hundred. In addition, there are all the policy suggestions made in
newspaper editorials and op-ed contributions across Europe. The SGP has truly contributed to
a lively debate on European economic issues.
Why do we see this multiplicity of recommendations? In our view, several - at least seven -
factors contribute to this striking outcome. They are highly interrelated - in particular the first
three factors discussed below.
1. The crisis of the SGP: One of the main reasons is, of course, the crisis of the SGP in 2003-
2005. The Pact came under heavy criticism due to the difficulties of several Member States in
living up to the rules. As the Pact did not deliver the fiscal performance it was supposed to,
this perceived failure created incentives to produce recommendations for reforms.
Actually, it is the task of economists to accept such challenges in the public arena. They do so
whenever they see a prospect of improving current policies. This pattern is evident throughout
the history of economics as an academic field. Current economic problems create a demand
for policy advice, and the economics profession stands ready to supply it. This makes research
in economics topical and event-driven, in particular in the field of fiscal and monetary
policy.16 The 101 proposals for reform are a clear illustration of this pattern. We conjecture
that even if the Pact had worked efficiently and smoothly, such a success would in itself invite
policy proposals, although there would most likely have been fewer of them than was the
actual case with the Pact failing.
Our cluster analysis brings out the topicality of the policy proposals. It demonstrates that the
timing of the publication of proposals is closely tied to the degree of political tension
surrounding the Pact - the greater the tension, the more proposals. Although not all of the
authors refer explicitly to the problems of the SGP as the main factor behind their proposals,
the majority of them are inspired by the problems of implementing the Pact.
16 See for example Hicks (1967, p. 156): ‘but with monetary theory it is more often a particular understanding -
an understanding directed towards a particular problem, normally a problem of the time at which the work in
question was written. So monetary theories arise out of monetary disturbances.’
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