7. The effectiveness of fiscal policy may also suffer as a result of political considerations.

Political entrepreneurs find spending attractive but dislike imposing taxes. Thus, they are likely to run a deficit most of the time and thereby introduce an inflationary bias to fiscal policy. In addition, they may find it politically advantageous to follow an expansionary fiscal policy course before a major election, independent of economic conditions. Thus, in a democracy, the direction of fiscal policy may be determined by political factors rather than by economic stabilization requirements.