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

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  • Strauch, Rolf
  • Hallerberg, Mark
  • 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

Suggested Citation

  • Strauch, Rolf & Hallerberg, Mark & von Hagen, Jürgen, 2004. "The design of fiscal rules and forms of governance in European Union countries," Working Paper Series 419, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:2004419
    Note: 339130
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    More about this item

    Keywords

    budgetary procedures; European public finances; fiscal rules; public indebtedness;
    All these keywords.

    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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