Which factor can inhibit the effectiveness of fiscal policy?

Political gridlock and partisanship significantly inhibit the effectiveness of fiscal policy because they can prevent timely and decisive action from being taken by the government. When there is intense disagreement among political parties or factions, it can lead to stalled legislation and an inability to pass necessary fiscal measures such as changes in taxation or government spending.

For fiscal policy to be effective, it often requires a consensus to implement changes that address economic issues, such as recession or inflation. When political divisions create obstacles, the government may struggle to take coordinated and effective steps, delaying responses that could help stabilize or stimulate the economy. This inefficiency can lead to prolonged economic challenges and reduced public confidence in governmental institutions. In comparison, other factors like public interest, rapid decision-making, and optimistic forecasts may help facilitate effective policy, but they do not carry the same direct impact on obstructing necessary fiscal actions as political gridlock does.