Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80820
Authors: 
de Haan, Jakob
Jong-A-Pin, Richard
Mierau, Jochen O.
Year of Publication: 
2012
Series/Report no.: 
KOF Working Papers, KOF Swiss Economic Institute, ETH Zurich 303
Abstract: 
We analyze how budgetary institutions affect government budget deficits in member states of the European Union during 1984-2003 employing new indicators provided by Hallerberg et al. (2009). Using panel fixed effects models, we examine whether the impact of budgetary institutions on budget deficits is conditioned by political fragmentation (i.e., ideological differences among parties in government) and size fragmentation (i.e., the effective number of parties in government or the number of spending ministers). Our results suggest that strong budgetary institutions, no matter whether they are based on delegation to a strong minister of finance or on fiscal contracts, reduce the deficit bias in case of strong ideological fragmentation. In contrast, the impact of budgetary institutions is not conditioned by size fragmentation.
Subjects: 
budgetary institutions
fiscal policy
political fragmentation
size fragmentation
JEL: 
H62
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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