IDEAS home Printed from https://ideas.repec.org/a/bla/jcmkts/v63y2025i1p320-334.html
   My bibliography  Save this article

Fiscal Rules in the European Union: Less Is More

Author

Listed:
  • Bogdan Căpraru
  • Anastasios Pappas
  • Nicu Sprincean

Abstract

In this article, we examine the non‐linear relationship between the number of fiscal rules in place and compliance with the European Union's (EU) numerical fiscal targets included in the Stability and Growth Pact (SGP). Using a sample composed of 27 EU Member States for a period spanning 2000 to 2021, we document that countries' compliance with fiscal rules is positively associated with the number of numerical fiscal targets. However, this association only holds up to a specific threshold. Once this threshold is achieved, the relationship becomes negative, implying that the multiplication of numerical fiscal rules may undermine compliance, thereby reducing their effectiveness. In addition, we find that general elections and frequent changes in government reduce compliance, whereas economic adjustment programmes contribute positively to countries' compliance with fiscal targets. The findings bear critical policy implications against the backdrop of the current review of the European fiscal framework.

Suggested Citation

  • Bogdan Căpraru & Anastasios Pappas & Nicu Sprincean, 2025. "Fiscal Rules in the European Union: Less Is More," Journal of Common Market Studies, Wiley Blackwell, vol. 63(1), pages 320-334, January.
    • Handle: RePEc:bla:jcmkts:v:63:y:2025:i:1:p:320-334
    DOI: 10.1111/jcms.13628
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jcms.13628
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jcms.13628?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jcmkts:v:63:y:2025:i:1:p:320-334. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0021-9886 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.