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Fiscal Gimmickry in Europe: One-Off Measures and Creative Accounting

  • Vincent Koen
  • Paul van den Noord

Accounting conventions usually leave some room for judgment, which governments may be tempted to take advantage of, especially when fiscal rules bite or threaten to do so. The European experience over the past decade -- documented here in great detail -- illustrates that fiscal gimmicks come in many different guises, but also that some are less mischievous than others. Logit regression analysis confirms that when deficit rules or, to a lesser extent, debt thresholds tend to become more binding, recourse to gimmicks is more likely. It also suggests that more centralised budget systems are less prone to such gimmickry. The policy implications are clear as regards the virtues of transparent and consistent accounting practices, but more ambiguous regarding the merits or otherwise of one-off measures ... Astuces budgétaires en Europe : Mesures non récurrentes et créativité comptable En général, les conventions comptables sont sujettes à interprétation, et les gouvernements peuvent être tentés d’en profiter, notamment lorsqu’ils sont contraints, ou en voie de l’être, par des règles budgétaires. L’expérience européenne au cours de la décennie écoulée -- décrite ici avec force détails -- montre que les astuces budgétaires sont protéiformes, mais aussi que certaines posent moins de problèmes que d’autres. Des régressions logit confirment que lorsque les règles sur les déficits ou, dans une moindre mesure, les seuils d’endettement deviennent plus contraignants, la probabilité d’un recours à des astuces augmente. Elles corroborent également l’idée que les astuces tendent à être moins employées dans des systèmes budgétaires plus centralisés. Les implications de politique économique sont claires s’agissant des vertus de la transparence et de la cohérence des comptes, mais plus ambiguës concernant les mérites ou inconvénients des mesures non récurrentes ...

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 417.

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Date of creation: 10 Feb 2005
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Handle: RePEc:oec:ecoaaa:417-en
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