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

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  • Hallerberg, Mark
  • Strauch, Rolf
  • von Hagen, Jürgen

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. JEL Classification: H11, H61, H62

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Bibliographic Info

Paper provided by European Central Bank in its series Working Paper Series with number 0419.

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Date of creation: Dec 2004
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Handle: RePEc:ecb:ecbwps:20040419

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Keywords: budgetary procedures; European public finances; fiscal rules; public indebtedness;

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  12. 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.
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  20. Poterba, James M. & von Hagen, Jurgen (ed.), 1999. "Fiscal Institutions and Fiscal Performance," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226676234, March.
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