Do fiscal rules need budget transparency to be effective?

Bram Gootjes and Jakob de Haan

European Journal of Political Economy, 2022, vol. 75, issue C

Abstract: We examine whether fiscal rules’ impact on fiscal performance depends on budget transparency. Using panel data of 73 countries over the 2003–2013 period, we find that fiscal rules do not improve the government budget balance in case of low budget transparency. Furthermore, our results suggest that fiscal rules make (the success of) fiscal adjustments more likely but only when transparency is sufficiently high. These findings appear remarkably robust against including contextualizing factors that may influence the impact of fiscal rules and budget transparency. However, to detect fiscal rules' effect on fiscal adjustments, taking fiscal policy volatility into account is important.

Keywords: Fiscal policy; Fiscal adjustments; Fiscal consolidation; Fiscal rules; Budget transparency (search for similar items in EconPapers)
JEL-codes: E02 E62 H30 H6 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:75:y:2022:i:c:s017626802200026x

DOI: 10.1016/j.ejpoleco.2022.102210

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