Quantifying Institutional Fiscal Discipline – Development and Application of the Fiscal Rule Strictness Index (FRSI) in Germany, the USA, and the Czech Republic (2000–2024)

Background - Assessing fiscal discipline is often based on observed outcomes such as debt and deficit levels. However, these indicators reflect policy results rather than the underlying institutional design of fiscal rules. Existing datasets primarily capture the presence of rules but fail to evaluate their functional strictness. Aim - This paper develops a multidimensional index to systematically quantify the institutional strictness of fiscal rules and applies it to a comparative analysis of Germany, the United States, and the Czech Republic over the period 2000–2024. Methods - The study introduces the Fiscal Rule Strictness Index (FRSI), which aggregates six institutional dimensions: legal bindingness, numerical tightness, coverage, enforcement, escape clauses, and monitoring. The index is constructed using qualitative legal analysis and standardized coding of de-jure fiscal frameworks based on primary legislation and international datasets. Results - The findings reveal substantial cross-country differences in institutional strictness. Germany exhibits a highly restrictive framework due to constitutional anchoring and tight numerical constraints. The Czech Republic shows a significant increase in strictness following the 2017 reform but remains vulnerable to crisis-induced relaxations. In contrast, the United States scores lowest due to the absence of binding federal fiscal rules, despite strong subnational constraints. Recommendations - Future fiscal frameworks should strengthen coverage, limit circumvention through off-budget instruments, and ensure credible return paths after the activation of escape clauses. Practical relevance/social implications - The FRSI provides policymakers with a transparent tool to assess the credibility of fiscal commitments and improve communication with financial markets, particularly in high-debt environments. Originality/value: The study contributes to the literature by introducing a theoretically grounded and empirically applicable index that moves beyond outcome-based measures and captures the multidimensional nature of institutional fiscal strictness.