Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161617
Authors: 
Reuter, Wolf Heinrich
Year of Publication: 
2017
Series/Report no.: 
Arbeitspapier, Sachverständigenrat zur Begutachtung der Gesamtwirtschaftlichen Entwicklung 01/2017
Abstract: 
This paper identifies determinants of compliance with various types of national numerical fiscal rules. Based on 51 fiscal rules in 20 EU member states from 1995 to 2015, the analysis identifies determinants among specific rule characteristics and their fiscal frameworks, as well as their political, (socio-)economic and supranational environments. While the average compliance across all rules and countries is around 50%, compliance with rules constraining stock (rather than flow) variables, set out in coalitional agreements, as well as rules covering larger parts of general government finances is significantly higher. Furthermore, independent monitoring and enforcement bodies (issuing real-time alerts) turn out to be significantly associated with a higher probability of compliance. Several theories of the deficit bias of governments due to government fragmentation, decentralization and political budget cycles are also significant with regards to compliance with fiscal rules. However, neither the economic environment or business cycle, nor forecast errors (except for an unexpectedly higher primary balance) on average seem to play a significant role.
Subjects: 
National Numerical Fiscal Rules
Compliance
Fiscal institutions
Deficit Bias
JEL: 
E62
H60
H11
Document Type: 
Working Paper

Files in This Item:
File
Size
445.33 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.