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Fiscal rules: the imitation game

Dorian Balvir

Applied Economics, 2024, vol. 56, issue 6, 708-727

Abstract: De jure fiscal rules have known a rapidly increasing popularity worldwide. This paper aims at analysing their spatial diffusion in 108 countries over the period 2001–2015 using a pooled version of the Bayesian SAR probit model. Using two different types of weighting (geographic proximity and bilateral trade) and desegregating the results for specific rules, I find a significant and positive spatial lag in line with the imitation (strategic complementarity) hypothesis. Rational imitation, deriving from a race to fiscal credibility, is preferred over the blind imitation hypothesis as the mimetic behaviour is revealed only in countries facing weaker fiscal reputation.

Date: 2024
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Working Paper: Fiscal Rules: The imitation game (2022) Downloads
Working Paper: Fiscal Rules: The imitation game (2022) Downloads
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DOI: 10.1080/00036846.2023.2170969

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