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Budget Forecast Errors in Spanish Municipalities: The Role of Transparency

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  • Israel García

    (University of Marburg)

Abstract

This paper examines whether budget transparency limits the use of creative accounting to circumvent fiscal rules. Using a Spanish reform that limited the obligation to provide regular budget information, I study the effect of relaxing transparency rules on budget forecast errors. I find that reducing the frequency of budget reporting leads to systematic underestimation of planned expenditures and revenues, especially in pre-electoral periods. I also investigate gender differences in budget forecast errors after introducing a gender quota.

Suggested Citation

  • Israel García, 2023. "Budget Forecast Errors in Spanish Municipalities: The Role of Transparency," MAGKS Papers on Economics 202327, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202327
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    File URL: https://www.uni-marburg.de/en/fb02/research-groups/economics/macroeconomics/research/magks-joint-discussion-papers-in-economics/papers/2023/27-2023_garcia.pdf
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    More about this item

    Keywords

    Budget transparency; Fiscal rules; Political forecast cycles; Gender; Spanish municipalities;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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