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Determinants of fiscal rules

Author

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  • Harald Badinger
  • Wolf Heinrich Reuter
Abstract
This article empirically assesses determinants of countries’ fiscal rules suggested by the political science, sociology and economics literature. We find several of these variables to be related to the stringency of fiscal rules, providing indirect evidence for the relevance of governments’ deficit bias. These determinants may also serve as instruments in models with (endogenous) fiscal rules as explanatory variable.

Suggested Citation

  • Harald Badinger & Wolf Heinrich Reuter, 2017. "Determinants of fiscal rules," Applied Economics Letters, Taylor & Francis Journals, vol. 24(3), pages 154-158, February.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:3:p:154-158
    DOI: 10.1080/13504851.2016.1173171
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    References listed on IDEAS

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    1. de Mello, Luiz Jr, 2000. "Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis," World Development, Elsevier, vol. 28(2), pages 365-380, February.
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    3. Woo, Jaejoon, 2005. "Social polarization, fiscal instability and growth," European Economic Review, Elsevier, vol. 49(6), pages 1451-1477, August.
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    5. Mr. Xavier Debrun & Mr. Manmohan S. Kumar, 2007. "The Discipline-Enhancing Role of Fiscal Institutions: Theory and Empirical Evidence," IMF Working Papers 2007/171, International Monetary Fund.
    6. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
    7. Papke, Leslie E. & Wooldridge, Jeffrey M., 2008. "Panel data methods for fractional response variables with an application to test pass rates," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 121-133, July.
    8. Poterba, James M, 1994. "State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 799-821, August.
    9. Badinger, Harald & Reuter, Wolf Heinrich, 2015. "Measurement of fiscal rules: Introducing the application of partially ordered set (POSET) theory," Journal of Macroeconomics, Elsevier, vol. 43(C), pages 108-123.
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    Cited by:

    1. Dorian Balvir, 2024. "Fiscal rules: the imitation game," Applied Economics, Taylor & Francis Journals, vol. 56(6), pages 708-727, February.
    2. Beetsma, Roel & Debrun, Xavier & Fang, Xiangming & Kim, Young & Lledó, Victor & Mbaye, Samba & Zhang, Xiaoxiao, 2019. "Independent fiscal councils: Recent trends and performance," European Journal of Political Economy, Elsevier, vol. 57(C), pages 53-69.
    3. Asma Arif & Umaima Arif, 2023. "Institutional Approach to the Budget Deficit: An Empirical Analysis," SAGE Open, , vol. 13(2), pages 21582440231, May.

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