6. The Global Financial Crisis and Beyond

At first glance, it could be said that the cycle that started in the 1970s and 1980s is repeating. Economic instability, increasing debts and large budget deficits are forcing governments to fundamentally reform and find savings while cutting taxes to encourage entrepreneurialism and growth. Except governments have already undergone fundamental reforms and cuts since the 1980s in many countries to close budget deficits and substantially reduce debt. Even with several surpluses, there was no reprieve. Yet one difference was that the 1980s saw a shift, for better or worse, to monetarism and NPM. This time there has been no paradigm shift, and it is just business as usual as far as fiscal rules go, and in some cases, the rules have become even stricter. The GFC seems to have affirmed the previous path rather than prompting a reassessment.