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The Determinants of Regional Budget Forecast Errors in Federal Economies: Spain 1995-2013

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  • Xisco Oliver Rullán

    (Universitat Illes Balears and Equalitas)

  • Joan Rosselló Villalonga

    (Universitat Illes Balears)

Abstract

This paper aims to test the relevance of political and institutional variables in explaining revenue and expenditure budget forecast errors. The results, based on aggregate expenditure and revenue data, suggest that the estimates are driven by the causality of expenditure forecast errors on revenue forecast errors and vice versa, which makes it impossible to disentangle the direction of the causality. The results also indicate that public sector debt, as well as some other institutional variables, plays a role in explaining forecast errors. The robustness of the coefficients depend on whether estimates are based on aggregate values rather than on budget items.

Suggested Citation

  • Xisco Oliver Rullán & Joan Rosselló Villalonga, 2018. "The Determinants of Regional Budget Forecast Errors in Federal Economies: Spain 1995-2013," Hacienda Pública Española / Review of Public Economics, IEF, vol. 226(3), pages 85-121, September.
    • Handle: RePEc:hpe:journl:y:2018:v:226:i:3:p:85-121
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    Cited by:

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    2. Picchio, Matteo & Santolini, Raffaella, 2020. "Fiscal rules and budget forecast errors of Italian municipalities," European Journal of Political Economy, Elsevier, vol. 64(C).
    3. Lekha Chakraborty & Pinaki Chakraborty & Ruzel Shrestha, 2020. "Budget Credibility of Subnational Governments: Analyzing the Fiscal Forecasting Errors of 28 States in India," Economics Working Paper Archive wp_964, Levy Economics Institute.

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    More about this item

    Keywords

    Fiscal federalism; forecast errors; tax autonomy.;
    All these keywords.

    JEL classification:

    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • 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

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