Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96850
Authors: 
Mierau, Jochen O.
Andreu, Eduard Suari
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4693
Abstract: 
This paper studies the impact of national fiscal rules on government size as measured by the ratio of government expenditures to gross domestic product. We develop a model of the budgetary process and show that a common pool problem may arise which can be mitigated through fiscal rules. We test the model’s predictions using a novel time-series cross-section dataset of 27 European Union members for the period between 1990 and 2011. Corroborating the model, we find that fiscal rules have a negative impact on government size. Contrasting the model, their impact becomes smaller as the number of ministers increases.
Subjects: 
political fragmentation
fiscal rules
government size
JEL: 
H11
H61
E61
Document Type: 
Working Paper

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