Peter Munk Christiansen

The article examines the adoption of the Danish 2012 “Budget Law.” The law added spending ceilings, economic sanctions and mandatory balanced budgets. The law was passed to address the lack of cost control in Danish municipalities and asymmetrical preferences concerning public expenditures and can be interpreted as a credible commitment initiative established to ensure public expenditure control independently of the business cycle. Due to the economic crisis, Danish voters preferred lower public expenditures in 2011 than in 2007. This shift in voter preferences made it easier for the Danish Parliament to pass the Budget Law.