Determinants of compliance with fiscal rules: Misplaced efforts or hidden motivations?

Carolina Ulloa-Suárez

European Journal of Political Economy, 2023, vol. 78, issue C

Abstract: This paper empirically examines which factors have influenced numerical compliance with fiscal rules in Latin American and Caribbean countries over the period 2000 to 2020. We use logistic regression models to associate three groups of specific factors with a greater or lesser probability of compliance with the rule: the macroeconomic and political environment of the countries and the design features of the enforced rules. We find that only changes in the macroeconomic and political context affect the probability of compliance with the enforced rules. In contrast, the institutional design of the fiscal rules does not seem to play an essential role in the compliance outcome. This result suggests that adjustments in this direction are not decisive for rule compliance.

Keywords: Fiscal rules; Latin America; Compliance (search for similar items in EconPapers)
JEL-codes: E61 E62 O57 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:78:y:2023:i:c:s0176268023000435

DOI: 10.1016/j.ejpoleco.2023.102399

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