Advanced Search
MyIDEAS: Login to save this article or follow this journal

Fiscal institutions and public spending volatility in Europe

Contents:

Author Info

  • Albuquerque, Bruno

Abstract

This work provides empirical evidence for a sizeable, statistically significant negative impact of the quality of fiscal institutions on public spending volatility for a panel of 23 EU countries over the 1980–2007 period. The dependent variable is the volatility of discretionary fiscal policy, which does not represent reactions to changes in economic conditions. Our baseline results thus give support to the strengthening of institutions to deal with excessive levels of discretion volatility, as more checks and balances make it harder for governments to change fiscal policy for reasons unrelated to the current state of the economy. Our results also show that bigger countries and bigger governments have less public spending volatility. In contrast to previous studies, the political factors do not seem to play a role, with the exception of the Herfindahl index, which suggests that a high concentration of parliamentary seats in a few parties would increase public spending volatility.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0264999311001891
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 6 ()
Pages: 2544-2559

as in new window
Handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2544-2559

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Fiscal policy; Policy volatility; Fiscal rules; Fiscal institutions;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Afonso, António & Furceri, Davide, 2008. "Government size, composition, volatility and economic growth," Working Paper Series, European Central Bank 0849, European Central Bank.
  2. Xavier Debrun & Laurent Moulin & Alessandro Turrini & Joaquim Ayuso-i-Casals & Manmohan S. Kumar, 2008. "Tied to the mast? National fiscal rules in the European Union," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 23, pages 297-362, 04.
  3. Bruno Albuquerque, 2010. "Fiscal Institutions and Public Spending Volatility in Europe," Working Papers, Banco de Portugal, Economics and Research Department w201017, Banco de Portugal, Economics and Research Department.
  4. Furceri, Davide & Poplawski Ribeiro, Marcos, 2008. "Government spending volatility and the size of nations," Working Paper Series, European Central Bank 0924, European Central Bank.
  5. António Afonso & Luca Agnello & Davide Furceri, 2008. "Fiscal Policy Responiveness, Persistence and Discretion," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2008/50, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  6. Roberto Perotti & Massimo V. Rostagno & Gian-Maria Milesi-Ferretti, 2001. "Electoral System and Public Spending," IMF Working Papers 01/22, International Monetary Fund.
  7. Hallerberg, Mark & Strauch, Rolf & Hagen, Jürgen von, 2006. "The design of fiscal rules and forms of governance in European Union countries," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 150, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Crivelli, Ernesto, 2013. "Fiscal impact of privatization revisited: The role of tax revenues in transition economies," Economic Systems, Elsevier, vol. 37(2), pages 217-232.
  2. Bruno Albuquerque, 2012. "Fiscal institutions and public spending volatility in Europe," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department, Banco de Portugal, Economics and Research Department.
  3. Agnese Sacchi & Simone Salotti, 2014. "The influence of decentralized taxes and intergovernmental grants on local spending volatility," Working Papers, Universidade de Vigo, GEN - Governance and Economics research Network 1405, Universidade de Vigo, GEN - Governance and Economics research Network.
  4. Yuan-Hong Ho & Chiung-Ju Huang, 2013. "Presidential Election, Checks and Balances, and Allocation of Public Expenditures in Taiwan," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, College of Business, Feng Chia University, Taiwan, vol. 9(1), pages 31-53, January.
  5. Naotaka Sugawara, 2014. "From Volatility to Stability in Expenditure: Stabilization Funds in Resource-Rich Countries," IMF Working Papers 14/43, International Monetary Fund.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2544-2559. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.