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Fiscal decentralization, fiscal rules and fiscal discipline

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  • Neyapti, Bilin

Abstract

Fiscal decentralization (FD) and fiscal rules (FR) are institutional mechanisms that are implemented by varying degrees in increasing number of countries. This paper investigates empirically the effect of FR on the effectiveness of FD in achieving fiscal discipline. Panel evidence strongly supports that balanced budget and expenditure rules help FD to achieve this goal, while debt rule has a direct disciplinary effect.

Suggested Citation

  • Neyapti, Bilin, 2013. "Fiscal decentralization, fiscal rules and fiscal discipline," Economics Letters, Elsevier, vol. 121(3), pages 528-532.
    • Handle: RePEc:eee:ecolet:v:121:y:2013:i:3:p:528-532
    DOI: 10.1016/j.econlet.2013.10.006
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    More about this item

    Keywords

    Fiscal institutions; Fiscal decentralization; Fiscal rules; Budget deficits;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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