The design of fiscal rules and forms of governance in European Union countries

Mark Hallerberg (hallerberg@hertie-school.org), Rolf Strauch and Juergen von Hagen

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper uses a new data set on budgetary institutions in Europe to examine the impact of fiscal rules and budget procedures in EU countries on public finances. It briefly describes the main pattern of budgetary institutions and their determinants across the EU 15 member states. Empirical evidence for the time period 1985-2004 suggests that the centralisation of budgeting procedures restrains public debt. In countries with one-party governments or coalition governments where parties are closely aligned and where political competition among them is low, this is achieved by the delegation of decision-making power to the minister of finance. Fiscal contracts that require countries to set multi-year targets and that reinforce those targets increase fiscal discipline in countries with ideologically dispersed coalitions and where parties regularly compete against each other.

Keywords: public indebtedness; budgetary procedures; fiscal rules; European public finances (search for similar items in EconPapers)
JEL-codes: H11 H61 H62 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-cba, nep-eec and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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https://epub.ub.uni-muenchen.de/13401/1/150.pdf (application/pdf)

Related works:
Journal Article: The design of fiscal rules and forms of governance in European Union countries (2007)
Working Paper: The design of fiscal rules and forms of governance in European Union countries (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:150

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