Policy Paper 17 | Excessive Fiscal Effort in Portugal?

It was to be called “Fiscal Effort, elements on a useful indicator but of cautious use”, which actually fits and matches the spirit of a large part of the text. However, the weight of Portugal in the analyzes and conclusions led to the especially interrogative title that ended up prevailing.

The paper “Excessive Fiscal Effort in Portugal? (in Portuguese) can be read in three short runs. In points 1 to 5, the reader can review the simple bases of Frank’s ratio and its descending parabolic inferences, as well as specify, in the annexes, definitions and precautions. Then, points 6 to 8 are dedicated to the fiscal effort in Portugal. The author observes that, among us, “something seems to stop the endogenous parabolic engine” of lowering the ratio, he asks “what does this mathematical force in the Portuguese ratio do” and considers it probable that we are in “fiscal over-effort”. On a different but confluent level, it mentions an indicator of “international fiscal competitiveness” that places us in one of the worst positions in 36 countries.

Finally, in point 9, the author shares responsibility for the “excessive fiscal effort” for the disappointing economic growth in Portugal and, by the way, makes several policy recommendations.