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Short-Term Pain for Long-Term Gain: The Impact of Structural Reform on Fiscal of Outcomes in EMU

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  • Paul van den Noord
  • Boris Cournède

Abstract

The 2005 reform of the EU Stability and Growth Pact has provided leeway for governments to let their fiscal deficit temporarily breach the 3% rule to finance the immediate budgetary cost of structural reform, such as compensation schemes to offset redistributive effects. Against this backdrop, it is useful to dispose of empirical estimates of the effect of structural reform on fiscal outcomes, not only the short term cost but also the long-run fiscal gain stemming from changes in spending parameters and better economic performance. Based on econometric estimates for a pool of 21 OECD countries, this study finds a significant net fiscal gain of structural reform. Quelques coûts à court terme pour des gains durables : Les conséquences budgétaires des réformes de structure dans l'UEM La réforme du Pacte de stabilité et de croissance (PSC) de l’Union européenne opérée en 2005 a ouvert la possibilité d’autoriser les États membres à dépasser temporairement le seuil de 3% afin de financer les coûts budgétaires de court terme que les réformes de structure peuvent engendrer, comme par exemple la compensation des effets distributifs non souhaités. Dans ce contexte, il est utile de disposer d’estimations empiriques des effets budgétaires des réformes de structure, non seulement s’agissant des coûts de court terme mais aussi des gains à long terme qui résultent des modifications des programmes de dépense publique et d’une meilleure performance économique. Au moyen d’estimations économétriques réalisées sur un panel de 21 pays membres de l’OCDE, cette étude conclut que les réformes structurelles se traduisent au plan budgétaire par un gain net d’une ampleur significative.

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File URL: http://dx.doi.org/10.1787/412188318674
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 522.

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Date of creation: 03 Nov 2006
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Handle: RePEc:oec:ecoaaa:522-en

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Keywords: fiscal policy; Economic and Monetary Union; stability and growth pact; Union économique et monétaire; pacte de stabilité et de croissance; politique budgétaire;

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