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Determinants of compliance with fiscal rules: Misplaced efforts or hidden motivations?

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  • Ulloa-Suárez, Carolina

Abstract

This paper empirically examines which factors have influenced numerical compliance with fiscal rules in Latin American and Caribbean countries over the period 2000 to 2020. We use logistic regression models to associate three groups of specific factors with a greater or lesser probability of compliance with the rule: the macroeconomic and political environment of the countries and the design features of the enforced rules. We find that only changes in the macroeconomic and political context affect the probability of compliance with the enforced rules. In contrast, the institutional design of the fiscal rules does not seem to play an essential role in the compliance outcome. This result suggests that adjustments in this direction are not decisive for rule compliance.

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  • Ulloa-Suárez, Carolina, 2023. "Determinants of compliance with fiscal rules: Misplaced efforts or hidden motivations?," European Journal of Political Economy, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:poleco:v:78:y:2023:i:c:s0176268023000435
    DOI: 10.1016/j.ejpoleco.2023.102399
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal rules; Latin America; Compliance;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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