Fiscal rules and government size in the European Union
AbstractThis 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.
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Bibliographic InfoPaper provided by University of Groningen, Research Institute SOM (Systems, Organisations and Management) in its series Research Report with number 14009-EEF.
Date of creation: 2014
Date of revision:
Other versions of this item:
- Jochen O. Mierau & Eduard Suari Andreu, 2014. "Fiscal Rules and Government Size in the European Union," CESifo Working Paper Series 4693, CESifo Group Munich.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-22 (All new papers)
- NEP-EEC-2014-03-22 (European Economics)
- NEP-PBE-2014-03-22 (Public Economics)
- NEP-PUB-2014-03-22 (Public Finance)
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