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The design of fiscal rules and forms of governance in European Union countries

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Author Info
Mark Hallerberg (Emory University, ZEI.)
Rolf Strauch () (Corresponding author: European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany)
Jürgen von Hagen (CEPR, University of Bonn, ZEI, Indiana University)

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Abstract

This paper examines the development of fiscal rules and budget procedures in EU countries, and their impact of public finances since the mid-1980s. It presents a new data set on institutional reforms and their impact in Europe. Empirical pattern confirm our prediction that more stringent fiscal rules exist under large coalition governments, while the centralisation of budgetary procedures is the main form of fiscal governance elsewhere. In addition, the centralisation of procedures does not restrain public debt in countries more prone to a rules-based approach, whereas more stringent fiscal rules seem to support fiscal discipline in almost all EU countries.

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Paper provided by European Central Bank in its series Working Paper Series with number 419.

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Length: 36 pages
Date of creation: Dec 2004
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Handle: RePEc:ecb:ecbwps:20040419

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Related research
Keywords: Public indebtedness; budgetary procedures; fiscal rules; European public finances.;

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Find related papers by JEL classification:
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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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.:
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    Other versions:
  2. Holger Gleich, 2003. "Budget institutions and fiscal performance in Central and Eastern European countries," Working Paper Series 215, European Central Bank. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Candelon, Bertrand & Muysken, Joan & Vermeulen, Robert, 2007. "Fiscal Policy and Monetary Integration in Europe: An Update," Research Memoranda 050, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
    Other versions:
  2. Hallerberg, Mark & Wolff, Guntram B., 2006. "Fiscal institutions, fiscal policy and sovereign risk premia," Discussion Paper Series 1: Economic Studies 2006,35, Deutsche Bundesbank, Research Centre. [Downloadable!]
  3. Lars P. Feld & Christoph A. Schaltegger, 2009. "Political Stability and Fiscal Policy - Time Series Evidence for the Swiss Federal Level since 1849," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Anthony Annett, 2006. "Enforcement and the Stability and Growth Pact: How Fiscal Policy Did and Did Not Change Under Europe's Fiscal Framework," IMF Working Papers 06/116, International Monetary Fund. [Downloadable!]
  5. Ondřej Schneider & Jan Zápal, 2006. "Fiscal Policy in New EU Member States: Go East, Prudent Man!," Post-Communist Economies, Taylor and Francis Journals, vol. 18(2), pages 139-166, June. [Downloadable!] (restricted)
    Other versions:
  6. Ian Lienert, 2007. "British Influence on Commonwealth Budget Systems: The Case of the United Republic of Tanzania," IMF Working Papers 07/78, International Monetary Fund. [Downloadable!]
  7. Niamh Hardiman & Patrick Murphy & Orlaith Burke, 2008. "Legitimating Fiscal Stabilization: Ireland in Comparative Perspective," Working Papers 200813, Geary Institute, University College Dublin. [Downloadable!]
  8. Álvaro Pina & Nuno Venes, 2007. "The Political Economy of EDP Fiscal Forecasts: An Empirical Assessment," Working Papers 2007/23, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.. [Downloadable!]
  9. Paulo Roberto Arvate & Marcos Felipe Mendes Lopes, 2007. "Institutional Changes, Incentive Schemes And The Decision To Undertake Fiscal Adjustments," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 010, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  10. Mark Hallerberg & Guntram Wolff, 2008. "Fiscal institutions, fiscal policy and sovereign risk premia in EMU," Public Choice, Springer, vol. 136(3), pages 379-396, September. [Downloadable!] (restricted)
  11. Ludger Schuknecht, 2004. "EU fiscal rules: issues and lessons from political economy," Working Paper Series 421, European Central Bank. [Downloadable!]
  12. Philipp Paulus, 2006. "The final blow to the Stability Pact? EMU enlargement and government debt," Otto-Wolff-Institut Discussion Paper Series 03/2006, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland. [Downloadable!]
  13. Ashoka Mody & Stefania Fabrizio, 2008. "Breaking the Impediments to Budgetary Reforms: Evidence from Europe," IMF Working Papers 08/82, International Monetary Fund. [Downloadable!]
  14. Hauptmeier, Sebastian & Heipertz, Martin & Schuknecht, Ludger, 2006. "Expenditure reform in industralised countries : a case study approach," ZEW Discussion Papers 06-50, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  15. Erik J. Lundbäck, 2008. "Medium-Term Budgetary Frameworks - Lessons for Austria from International Experience," IMF Working Papers 08/163, International Monetary Fund. [Downloadable!]
  16. Macedo, Jorge Braga de, 2007. "A mudança do regime cambial português: Um balanço 15 anos depois de Maastricht," FEUNL Working Paper Series wp502, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
  17. Andrews, Matthew, 2008. "Are One-Best-Way Models of Effective Government Suitable for Developing Countries?," Working Paper Series rwp08-014, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  18. Beetsma, Roel & Giuliodori, Massimo & Wierts, Peter, 2009. "Budgeting versus implementing fiscal policy in the EU," CEPR Discussion Papers 7285, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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