Do fiscal rules cause budgetary outcomes?
AbstractThis paper focuses on the observed empirical relationship between fiscal rules and budget deficits, and examines whether this correlation is driven by an omitted variable, namely voter preferences. We make use of two different estimation methods to capture voter preferences in a panel of Swiss sub-federal jurisdictions. First, we include a recently constructed measure of fiscal preferences. Second, we capture preferences through fixed effects with a structural break as women are enfranchised. We find that fiscal rules continue to have a significant impact on real budget balances.
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 136 (2008)
Issue (Month): 1 (July)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100332
Fiscal policy; Fiscal rules; Fiscal institutions; Budget deficits; Fiscal preferences; Endogeneity; C2; D7; E6; H6;
Other versions of this item:
- Signe Krogstrup & Sébastien Wälti, 2007. "Do fiscal rules cause budgetary outcomes?," Trinity Economics Papers tep0607, Trinity College Dublin, Department of Economics.
- Signe Krogstrup & Sébastien Wälti, 2007. "Do fiscal rules cause budgetary outcomes?," IHEID Working Papers 15-2007, Economics Section, The Graduate Institute of International Studies, revised May 2007.
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H6 - Public Economics - - National Budget, Deficit, and Debt
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