Do coalition governments really suffer from short time horizons in fiscal policy-making, as posited by standard political economy models? This article focuses on coalitions which have created high levels of familiarity through shared governing experience in the past and which are likely to cooperate again in future governing coalitions. I argue that such coalitions have incentives to internalize the future costs of debt accumulation and reach credible agreements to balance their constituencies'

more »

... fiscal preferences. Moreover, sustaining broad coalitions should have electoral advantages to implementing controversial economic reforms, thus resulting with lower debt increases compared not only to less durable coalitions, but also to single-party governments. Comparing 36 OECD/EU democracies between (up to) 1962 and 2013, I estimate the effects of coalitions' cooperation prospects on the dynamics of public debt. The findings indicate that long time horizons can help coalitions to overcome intertemporal coordination problems and to reach specific policy goals.