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Do National Numerical Fiscal Rules Really Shape Fiscal Behaviours in Developing Countries? A Treatment Effect Evaluation

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  • Rene Tapsoba

    (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)

Abstract

This paper analyses the effect of National Numerical Fiscal Rules (FRs) upon fiscal discipline in 74 developing countries over the period 1990-2007. It is the first study that assesses the impact of FRs on budgetary outcomes while controlling for the self-selection problem. It finds that the effect of FRs on structural fiscal balance is significantly positive, robust to a variety of alternative specifications, and varies with the type of FRs. It also finds that the treatment effect differs according to countries characteristics: number of FRs, time length since FRs adoption, presence of supranational FRs, government fractionalisation and government stability.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00667201.

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Date of creation: 07 Feb 2012
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Handle: RePEc:hal:wpaper:halshs-00667201

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Related research

Keywords: Fiscal rules; Fiscal discipline; Treatment effect; Propensity Scores-Matching; developing countries;

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  1. International Monetary Fund, 2010. "A Historical Public Debt Database," IMF Working Papers 10/245, International Monetary Fund.
  2. George Kopits & Steven A. Symansky, 1998. "Fiscal Policy Rules," IMF Occasional Papers 162, International Monetary Fund.
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  5. Lin, Shu & Ye, Haichun, 2007. "Does inflation targeting really make a difference? Evaluating the treatment effect of inflation targeting in seven industrial countries," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(8), pages 2521-2533, November.
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  7. Torsten Persson, 2001. "Currency unions and trade: how large is the treatment effect?," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 16(33), pages 433-462, October.
  8. George Kopits, 2001. "Fiscal Rules," IMF Working Papers 01/145, International Monetary Fund.
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  14. Lin, Shu & Ye, Haichun, 2009. "Does inflation targeting make a difference in developing countries?," Journal of Development Economics, Elsevier, Elsevier, vol. 89(1), pages 118-123, May.
  15. repec:fth:eeccco:96 is not listed on IDEAS
  16. Antonio Fatás & Ilian Mihov, 2003. "The Case For Restricting Fiscal Policy Discretion," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(4), pages 1419-1447, November.
  17. Barry Eichengreen & Charles Wyplosz, 1998. "The Stability Pact: more than a minor nuisance?," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 13(26), pages 65-113, 04.
  18. Alberto Alesina & Roberto Perotti, 1995. "The Political Economy of Budget Deficits," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 1-31, March.
  19. Sophia Gollwitzer, 2011. "Budget Institutions and Fiscal Performance in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 20(1), pages 111-152, January.
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Cited by:
  1. Christian Mumssen & Yasemin Bal-Gunduz & Christian Ebeke & Linda Kaltani, 2013. "IMF-Supported Programs in Low Income Countries: Economic Impact over the Short and Longer Term," IMF Working Papers 13/273, International Monetary Fund.
  2. Chakraborty, Pinaki & Dash, Bharatee Bhusana, 2013. "Fiscal Reforms, Fiscal Rule and Development Spending: How Indian States have Performed?," Working Papers, National Institute of Public Finance and Policy 13/122, National Institute of Public Finance and Policy.
  3. Pierre MANDON, 2014. "Evaluating Treatment Effect and Causal Effect of Fiscal Rules on Procyclicality New assessments on old debate: rules vs. discretion," Working Papers halshs-01015756, HAL.
  4. Pierre MANDON, 2014. "Evaluating Treatment Effect and Causal Effect of Fiscal Rules on Procyclicality New assessments on old debate: rules vs. discretion," Working Papers halshs-01015760, HAL.
  5. Jean-Louis Combes & Xavier Debrun & Alexandru Minea & Rene Tapsoba, 2014. "Inflation Targeting and Fiscal Rules: Do Interactions and Sequencing Matter?," IMF Working Papers 14/89, International Monetary Fund.

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