The Design of Fiscal Rules and Forms of Governance in European Union Countries

By Mark Hallerberg, Rolf R. Strauch, J. Hagen. Social Science Research Network, 2007

423 citations recorded by the source corpus.

This paper uses a new data set on budgetary institutions in Europe to examine the impact of fiscal rules and budget procedures in EU countries on public finances. It briefly describes the main pattern of budgetary institutions and their determinants across the EU 15 member states. Empirical evidence for the time period 1985-2004 suggests that the centralisation of budgeting procedures restrains public debt. In countries with one-party governments or coalition governments where parties are closely aligned and where political competition among them is low, this is achieved by the delegation of decision-making power to the minister of finance. Fiscal contracts that require countries to set multi-year targets and that reinforce those targets increase fiscal discipline in countries with ideologically dispersed coalitions and where parties regularly compete against each other.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/227979b2717d1c25ec43921d41d4122861828fec

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Citations in the corpus

Transparency, Political Polarization, and Political Budget Cycles in OECD Countries (2006, background): “We should add that, despite Stability and Convergence Programmes, EU countries do not report harmonized responses to items in the index, probably because the Programmes are not connected to annual budget processes (Hallerberg, Strauch, and von Hagen 2004).”
The Good Governance Agenda: Beyond Indicators without Theory (2008, background): “…from strands as varied as public finance and sociology could provide ideas about why different governments might identify these challenges differently, for example because of different political decision-making structures and social logics (Hallerberg et al., 2007; WoolseyBiggart & Guillen, 1999).”
Fiscal institutions, fiscal policy and sovereign risk premia in EMU (2008, positive): “For the perspective of this paper, a strong finance minister may be useful to markets for an additional reason not covered in the fiscal governance literature (see e.g., von Hagen and Harden 1995; Hallerberg 2004; Hallerberg et al. 2007a).”
Good Government Means Different Things in Different Countries (2010, neutral): “While one may argue that all of the governments exhibit formal bureaucratic systems with disciplined budgetary processes, for example, and are commonly focused on introducing new public management mechanisms, differences in the details of how these systems work are quite significant (Curristine 2005”
The perfect finance minister: Whom to appoint as finance minister to balance the budget? (2014, neutral): “Some contributions focus on the procedural rules of the finance minister in the budget process (e.g., Hagen and Harden, 1995; Hallerberg and Hagen, 1999; Hallerberg, Strauch, and Hagen, 2007).”
The impact of extreme weather events on budget balances (2009, positive): “A vast literature has emerged on identifying the factors that drive fiscal balances and the accumulation of debt (see, for example, Tujula and Wolswijk 2007; Hallerberg et al. 2004; Hallerberg and von Hagen 1999; Woo 2003; Gali and Perotti 2003).”