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National Fiscal Rules and Fiscal Discipline in the European Union

Author

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  • Amelie Barbier-Gauchard

    (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Kea Baret

    (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Alexandru Minea

    (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA [2017-2020] - Université Clermont Auvergne [2017-2020])

Abstract

Motivated by the fiscal imbalances in the EU countries in the recent period, this paper analyzes the effect of national fiscal rules on fiscal discipline. Using a careful definition of national fiscal rules combined with a novel measure of fiscal discipline (the Global Financial Performance Index-GFPI), propensity score matching estimations that account for potential endogeneity reveal that fiscal rules significantly improve the GFPI. However, this favorable effect dramatically depends upon the type of fiscal rule and different structural factors. These two features, together with alternative measures of fiscal discipline, are found to be key ingredients that should be taken into account when assessing the effects of fiscal rules on fiscal discipline.

Suggested Citation

  • Amelie Barbier-Gauchard & Kea Baret & Alexandru Minea, 2020. "National Fiscal Rules and Fiscal Discipline in the European Union," Working Papers hal-02992219, HAL.
  • Handle: RePEc:hal:wpaper:hal-02992219
    Note: View the original document on HAL open archive server: https://hal.uca.fr/hal-02992219
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    Keywords

    Fiscal Discipline; National Fiscal Rules; Propensity Score Matching;
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