National fiscal rules and fiscal discipline in the European Union

Amélie Barbier-Gauchard (), Kea Baret () and Alexandru Minea
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Amélie Barbier-Gauchard: BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Kea Baret: BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: Motivated by the fiscal imbalances in the EU countries in the recent period, this paper analyzes the effect of national fiscal rules 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 favourable 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.

Keywords: Fiscal discipline; National fiscal rules; Propensity score matching (search for similar items in EconPapers)
Date: 2021-03-05
Note: View the original document on HAL open archive server: https://uca.hal.science/hal-03160610v1
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Citations: View citations in EconPapers (19)

Published in Applied Economics, 2021, 53 (20), pp.2337-2359. ⟨10.1080/00036846.2020.1859453⟩

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Working Paper: National Fiscal Rules and Fiscal Discipline in the European Union (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03160610

DOI: 10.1080/00036846.2020.1859453

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