The Stalled Pendulum Dilemma

Why Fiscal Disorder Survives Changes of Government and How to Break the Inertia

THE STALLED PENDULUM DILEMMA
Why Fiscal Disorder Survives Changes of Government and How to Break the Inertia
By Dr. Nelson Jorge Mosco Castellano

The diagnosis is on the table: disorder in public spending and the constant alteration of state priorities erode the social fabric, destroy institutional trust, and suffocate growth.
Disorder in public spending resulting from instability or constant changes in political priorities is one of the central issues of political economy and the theory of the state. This phenomenon generally occurs when governments abandon long-term structural responsibilities in order to respond to short-term incentives, such as electoral cycles, pressure from interest groups, or temporary crises.
Fundamental authors who have addressed this problem from the perspective of state responsibilities and the inefficient allocation of resources include James M. Buchanan and Gordon Tullock.
They are the founding fathers of public choice theory. They analyze how politicians and parties do not necessarily seek the “general interest” or optimal social welfare, but rather to maximize their own chances of reelection.
They argue that constant changes in public spending priorities respond to the need of governments to satisfy specific pressure groups in the short term.
This destroys fiscal discipline and blurs the essential responsibilities of the state, transforming the budget into a tool of political exchange, or clientelism, rather than an instrument for the stable provision of public goods.
Along the same lines, Friedrich A. Hayek was a staunch critic of state interventionism and a defender of the spontaneous order of the market.
Hayek argued that when the state arbitrarily expands its responsibilities beyond its minimum functions, guaranteeing law, order, and basic contracts, it becomes a chaotic agent.
Constant shifts in political priorities within the economy generate what he called the loss of “abstract rules of conduct,” making public spending unpredictable, distorting relative prices, and undermining overall economic coordination.

William A. Niskanen, in his book “Bureaucracy and the Budget,” was the creator of the economic theory of bureaucracy.
He analyzed how state bureaucracies maximize their budgets beyond what is socially efficient.
When political priorities change abruptly, public administrations rarely reduce previous budgets; they simply add new layers of spending. This generates chaotic growth of the state, duplication of functions, and an erosion of institutional responsibility, since no one assumes the real cost of the disorderly expansion of spending.
Mancur Olson, a specialist in collective action and the decline of nations, studied how stable democracies become filled with distributional coalitions, or special-interest groups, that continuously pressure the state.
As governments or political alliances change, spending priorities are reconfigured to benefit these particular groups.
This generates structural disorder that overloads the functions of the state and diverts resources away from fundamental macroeconomic responsibilities toward subsidies and sectoral privileges.
However, the real obstacle is not understanding the theoretical problem, but implementing the solution.
Asking the political class to limit itself is, in essence, asking the fox to guard the henhouse. The political dynamics of recent times starkly reflect this institutional trap.
After long periods of disorderly spending expansion, waste, and opacity, attempts by alternation in government and coalitions to restore fiscal order systematically collide with a lack of political strength and the heavy inertia of the state apparatus.
The result is an implacable pendulum: exhaustion and discredit open the door to new versions of the old left, more incompetent and disconnected from reality, which perpetuate the cycle of stagnation and generate profound rejection in public opinion.
This scenario raises an uncomfortable but inevitable question: how can this inertia be broken when the very agents of cumulative disorder control the levers of power?
Expecting the political class to adopt a program of austerity and fiscal discipline out of its own conviction is a futile exercise.
Electoral incentives reward the short term: distributing subsidies, creating ministries, satisfying distributional coalitions such as unions, corporations, and pressure groups, and, of course, patching with public money problems that become permanent and increasingly costly, yields immediate votes, while the costs of fiscal disorder are deferred over time.
When an administration attempts to correct the course, it confronts an oversized state that acts as a bloc of corporate resistance whose effects also involve Parliament.
Thus, the political pendulum swings again and again, trapping society in a false dichotomy in which the faces change, but the logic of profligacy remains intact.
The political system acts according to its own interests, ignoring the debacle and adjusting its privileges, benefits, and corrupt practices by comparing them with the cost of the worst and most corrupt members of its own class.

The political system by itself is incapable of breaking the cycle. History and economic theory indicate that profound reforms emerge only when external and structural counterweights are activated:
The solution is not to trust the government of the day, but to tie its hands through rigid legal frameworks.
If the legal system establishes strict borrowing rules and severely penalizes the discretionary diversion of funds, the budget ceases to be political spoils and becomes an obligation whose fulfillment is unavoidable.
Against concentrated interest groups that defend their privileges tooth and nail, the only effective counterweight is organized public opinion.
Radical transparency and new tools for citizen oversight are indispensable for making visible the real cost that every act of political waste imposes on the taxpayer’s pocket.
Often, inertia is broken only when the current model becomes unsustainable. When the weight of the state apparatus and economic inefficiency reach a breaking point, the cost of doing nothing finally exceeds the political cost of reform, opening a historic window of opportunity for profound change.

Conclusion: Toward a New Pact of Responsibility
The public discontent that polls currently reflect toward inefficient administrations and an inoperative opposition demonstrates that society perceives the exhaustion of the old formulas.
Nevertheless, the “more or less” that summarizes the collective mood reveals that skepticism remains high.
Breaking the pendulum of disorder does not simply require winning an election, but building a social and institutional bloc capable of shielding state priorities from demagoguery.
Restoring harmony to society requires transforming fiscal discipline and economic freedom into permanent state policies, subordinating the appetite of politics to the real needs of the community.
But macroeconomic order is a necessary yet insufficient condition. Trust lost because of the historical record takes time to rebuild, so that savings, investment, and the return of capital can once again become the driving forces of the growth society needs in order to begin the process of development.

Public spending inertia
Institutional fiscal discipline
Counterweights to political power

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