This paper provides a cautionary tale for those who seek to imprint on current changes in budgeting practices and institutions a qualitative and quantitative turn to fiscal discipline. There is, without doubt, unprecedented external pressure to ‘cut-down’, ‘pare down’ and ‘curtail’, the pro-crisis sanctity of national sovereignty in budget and fiscal policy-making being under attack. Why rush to assume, however, that the ‘new’ budgeting tools at national level or the ‘new’ fiscal compact at Eurozone level will solidify the current drive for centralization (of executive decisions) and insulation (from public deliberation) and, in the process, deliver on savings, tax rises, and structural reforms? Worse, why assume that this time around sanctions and constraints will imbue discipline, only because they are more stringent or embedded in national laws and constitutions? In situating executives at the centre of budget reform, the prevalent assumption, which correlates fiscal adjustment with the type of government implementing it, single-party majority or coalition, needs to be re-examined to take into account two factors: political will and democratic legitimacy. The two are becoming increasingly hard to find, with governments in the periphery having to face unprecedented levels of economic stagnation and unemployment. Taking stock of developments in the program countries, Greece, Ireland, and Portugal, the paper will argue that changes will be effective only to the extent that they can be both enforceable and legitimated- the latter will be partly dependent on the basis of burden sharing with the core- if continued, the major asymmetry in shouldering adjustment will be detrimental. Each case is, of course, different, with national political culture and institutional capacity affecting policy makers’ calculations. Facing a shrinking economy and social unrest, even the most virtuous policy makers might be tempted to dodge the same rules and institutions that they have voted as necessary.
