Policies·il_vat_cut_nonrenewal_2021

Israel pandemic VAT-cut non-renewal (2021)

ISR·2021 – 2021·Bennett–Lapid change coalitioncandidate

What the policy did

Policy choice under Finance Minister Liberman not to extend the temporary pandemic-era VAT reduction. Headline VAT remained at 17%. Framed as fiscal- consolidation measure alongside the first passed budget since 2018. The decision diverged from several OECD peers which extended pandemic VAT cuts into 2022, and was paired with targeted transfer supports.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended

↓

spending level

fiscal.spending_level

General government spending as share of GDP, excluding transfers already captured under fiscal.transfer_expansion to avoid double-counting.

decreased · weak

lower spending share

Revenue side normalisation reducing structural deficit.

Enacted by

israel_bennett_change_coalition_2021_2022

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Large welfare states sustain long-run real GDP per capita growth when paired with market flexibility (low product- and labour-market barriers), trade openness, and fiscal discipline (debt-to-GDP below 90%), but not when paired with rigid product and labour markets, in an OECD and rich- country panel 1980-2020.

welfare_state_market_flexibility_complementinferred

viafiscal.spending_level

PARTIAL — coef=+3.308e-18, p=0.653; effect magnitude effectively zero

partial

Truss 2022 mini-budget shows that unfunded fiscal expansion above the ZLB triggers sharp bond-market and currency responses through expected-inflation and risk-premium channels.

unfunded_fiscal_expansion_above_zlb_bond_market_responseinferred

viafiscal.spending_level

SUPPORTED — GBP/USD trough on 2022-09-26 (1.0703) was 5.02% below the 2022-09-22 pre-announcement close (1.1269); log-decline +0.0515 clears the 3.0% threshold …

supported

Fiscal multipliers are state-dependent: large at ZLB, small near full employment; no single-number answer is policy-relevant.

fiscal_multipliers_state_dependentinferred

viafiscal.spending_level

REFUTED — sign - OPPOSITE claim +, cumulative_effect=-1.569, h=5, p_h=0.0155

refuted

The Soviet central-planning system, having already exhibited TFP stagnation 1970-1989, underwent a canonical institutional and economic collapse 1989-1998 as plan-enforcement was withdrawn without functioning market institutions in place.

soviet_union_central_planning_gdp_collapse_1989_1991inferred

viafiscal.spending_level

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['derived: count of canonical_metrics with threshold met']

run pending

UK Truss mini-budget 2022 gilt crisis reflected market confidence and institutional-framework rupture rather than an MMT-predicted hard fiscal limit, because the BoE restored order by intervening as issuer.

uk_truss_mini_budget_currency_sovereign_mechanisminferred

viafiscal.spending_level

partial — Both mechanism legs are directionally consistent but at least one fails the SUPPORTED threshold: FX leg holds (5.02% trough decline); yield leg partia…

partial

UK GDP per capita (PPP, constant international dollars) diverged negatively from a matched synthetic counterfactual of similar-income anglophone/developed economies (USA, CAN, AUS, NZL, DEU, NLD, CHE) starting around 2008 and widening post-2016 (Brexit referendum).

uk_economic_decline_multi_movementinferred

viafiscal.spending_level

INCONCLUSIVE_DATA_PENDING — treatment 'uk_post_2008' has no within-country variation under country fixed effects

run pending

Across the OECD 38, over 2000-latest, larger general government final consumption as a share of GDP is associated with slower growth in real household disposable income per capita, controlling for demographics, initial-income level, energy-price exposure, and trade openness.

state_size_reduces_household_income_growthinferred

viafiscal.spending_level

PARTIAL — coef=-1.248e-17, p=0.809; effect magnitude effectively zero

partial

Credible fiscal consolidation episodes — defined as sustained primary balance improvement of at least 2% of GDP over 3 years, not reversed within 5 years, and accompanied by declining debt-to-GDP trajectories — predict stronger subsequent 10-year real GDP per capita growth and private investment than repeated discretionary fiscal stimulus in mature economies, in an OECD panel 1980-2020.

fiscal_consolidation_credibility_growthinferred

viafiscal.spending_level

supported

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

Argentine sovereign debt restructuring 2005

Ley de Déficit Cero 25.453 (July 2001)

IMF Stand-By Arrangement (Jun 2018, expanded Sep 2018)

ARG·2018