Can public debt be used in a strategic sense by political parties? More specifically, can one envision governments altering significantly the level of their countries' public debt with a view to improving their chance of being reelected? Aghion and Bolton show that the answer to the first question may be positive. However, they (realistically) refrain from following up with a positive answer to the second, admitting in their conclusions that one does not seem to observe the political behaviour predicted by their model: ‘Are governments perhaps not as cynical as we make them appear in this model?’

Despite this discrepancy between the model and reality, this paper is both enjoyable and interesting and I agree with the authors that its contribution goes beyond one provocative but special result. At a general level it can be viewed as extending to the public debt issue, and to a world where the government's action is purely redistributive, the fundamental idea of the political business cycle literature: electoral considerations may be useful, perhaps necessary, to explain certain elements of economic policy, originally taken to mean macroeconomic policy.

In the first part of the paper, that is, as long as the rate of transformation between the private good and the public good is one, Aghion and Bolton's world is perfectly polarized: all citizens below the mean income level want full taxation and production of the public good at the maximal rate; all citizens above the mean income level want just the opposite: no public good and minimal taxation.