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National Fiscal Rules Adoption and Fiscal Discipline in the European Union

Author

Listed:
  • Amelie BARBIER-GAUCHARD
  • Kea BARET
  • Alexandru MINEA

Abstract

Motivated by the fiscal imbalances in the EU countries in the recent period, this paper analyzes the effect of national fiscal rules adoption on fiscal discipline. Using a careful definition of national fiscal rules combined with a novel measure of fiscal discipline (the Global Financial Performance Index—GFPI), propensity score matching estimations that account for potential endogeneity reveal that fiscal rules significantly improve the GFPI. However, this favorable effect dramatically depends upon the type of fiscal rule and different structural factors. These two features, together with alternative measures of fiscal discipline, are found to be key ingredients that should be taken into account when assessing the effects of fiscal rules on fiscal discipline.

Suggested Citation

  • Amelie BARBIER-GAUCHARD & Kea BARET & Alexandru MINEA, 2019. "National Fiscal Rules Adoption and Fiscal Discipline in the European Union," Working Papers of BETA 2019-40, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2019-40
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    File URL: http://beta.u-strasbg.fr/WP/2019/2019-40.pdf
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    References listed on IDEAS

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    Cited by:

    1. Amélie BARBIER-GAUCHARD, 2020. "Blueprint for the European Fiscal Union: State of knowledge and Challenges," Working Papers of BETA 2020-39, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Kéa Baret & Amélie Barbier-Gauchard & Théophilos Papadimitriou, 2021. "Forecasting the Stability and Growth Pact compliance using Machine Learning," Working Papers of BETA 2021-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. repec:hal:wpaper:hal-03121966 is not listed on IDEAS
    4. Kea BARET & Theophilos PAPADIMITRIOU, 2019. "On the Stability and Growth Pact compliance: what is predictable with machine learning?," Working Papers of BETA 2019-48, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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    More about this item

    Keywords

    Fiscal Discipline; National Fiscal Rules; Propensity Score Matching.;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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