This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

EU fiscal rules: issues and lessons from political economy

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Ludger Schuknecht () (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany)

Additional information is available for the following registered author(s):

Abstract

The paper analyses the EU fiscal rules from a political economy perspective and derives some policy lessons. Following a literature survey, the paper stresses the importance of appropriate incentives for rule compliance in an environment where national fiscal sovereignty precludes the option of centralised enforcement. In addition, the paper stresses the importance of clear and simple rules and in particular the 3% deficit limit in anchoring expectations of fiscal discipline and facilitating public and market monitoring of public finances. This, in turn, strengthens incentive for rule compliance. Moreover, the paper discusses the interests of the most important players in European fiscal rule formation and the importance of choosing the appropriate time for initiating a reform debate.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.ecb.europa.eu/pub/pdf/scpwps/ecbwp421.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by European Central Bank in its series Working Paper Series with number 421.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 36 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:ecb:ecbwps:20040421

Contact details of provider:
Postal: Postfach 16 03 19, Frankfurt am Main, Germany
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/home/html/index.en.html
More information through EDIRC

Order Information:
Postal: Press and Information Division, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany
Email:

For technical questions regarding this item, or to correct its listing, contact: (Official Publications).

Related research
Keywords: Political economy; fiscal rules; Stability and Growth Pact; deficits; institutional reform.;

Find related papers by JEL classification:
D7 - Microeconomics - - Analysis of Collective Decision-Making
H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
H6 - Public Economics - - National Budget, Deficit, and Debt

This paper has been announced in the following NEP Reports:

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.:
  1. Jordi GalÌ & Roberto Perotti, 2003. "Fiscal policy and monetary integration in Europe," Economic Policy, CEPR, CES, MSH, vol. 18(37), pages 533-572, October. [Downloadable!] (restricted)
    Other versions:
  2. George Kopits & Steven A. Symansky, 1998. "Fiscal Policy Rules," IMF Occasional Papers 162, International Monetary Fund.
  3. Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Mark Hallerberg & Rolf Strauch & Jürgen von Hagen, 2004. "The design of fiscal rules and forms of governance in European Union countries," Working Paper Series 419, European Central Bank. [Downloadable!]
    Other versions:
  5. Jose Marin, 2002. "Sustainability of public finances and automatic stabilisation under a rule of budgetary discipline," Working Paper Series 193, European Central Bank. [Downloadable!]
  6. Jesús Fernández-Huertas Moraga & Jean-Pierre Vidal, 2004. "Fiscal sustainability and public debt in an endogenous growth model," Working Paper Series 395, European Central Bank. [Downloadable!]
  7. Kenneth Rogoff, 1990. "Equilibrium Political Budget Cycles," NBER Working Papers 2428, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. J. de Haan & H. Berger & D. Jansen, 2003. "The end of the stability and growth pact?," WO Research Memoranda (discontinued) 748, Netherlands Central Bank, Research Department. [Downloadable!]
    Other versions:
  9. Kerstin Bernoth & Jürgen von Hagen & Ludger Schuknecht, 2004. "Sovereign risk premia in the European government bond market," Working Paper Series 369, European Central Bank. [Downloadable!]
  10. Vincent Koen & Paul van den Noord, 2005. "Fiscal Gimmickry in Europe: One-Off Measures and Creative Accounting," OECD Economics Department Working Papers 417, OECD, Economics Department. [Downloadable!]
  11. J. D. Craig & George Kopits, 1998. "Transparency in Government Operations," IMF Occasional Papers 158, International Monetary Fund.
  12. Roel M. W. J. Beetsma & Xavier Debrun, 2005. "Implementing the Stability and Growth Pact: Enforcement and Procedural Flexibility," IMF Working Papers 05/59, International Monetary Fund. [Downloadable!]
    Other versions:
  13. Philipp C. Rother & Marco Catenaro & Gerhard Schwab, 2004. "Aging and Pensions in the Euro Area," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(4), pages 593-, December.
  14. Albert Jaeger & Ludger Schuknecht, 2004. "Boom-Bust Phases in Asset Prices and Fiscal Policy Behavior," IMF Working Papers 04/54, International Monetary Fund. [Downloadable!]
    Other versions:
  15. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June. [Downloadable!] (restricted)
  16. Felix Eschenbach & Ludger Schuknecht, 2004. "Budgetary risks from real estate and stock markets," Economic Policy, CEPR, CES, MSH, vol. 19(39), pages 313-346, 07. [Downloadable!] (restricted)
Full references

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. 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!]
  2. 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!]
  3. 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)
  4. Buti, Marco & Eijffinger, Sylvester & Franco, Daniele, 2005. "The stability pact pains : a forward-looking assessment of the reform debate," Discussion Paper 101, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  5. Roel M.W. J. Beetsma & Xavier Debrun, 2005. "Implementing the stability and growth pact - enforcement and procedural flexibility," Working Paper Series 433, European Central Bank. [Downloadable!]
    Other versions:
  6. Otmar Issing, 2006. "Europe’s hard fix: the Euro area," International Economics and Economic Policy, Springer, vol. 3(3), pages 181-196, December. [Downloadable!] (restricted)
  7. Michael Sturm & Nikolaus Siegfried, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank. [Downloadable!]
Statistics
Access and download statistics

Did you know? Citation analysis on IDEAS includes online papers that are freely accessible and whose text could be automatically analyzed, currently about 210000 papers.

This page was last updated on 2010-1-4.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.