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

Carolina Ulloa-Suárez ()
Additional contact information
Carolina Ulloa-Suárez: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

Working Papers from HAL

Abstract: The effects of the COVID-19 pandemic led many governments to suspend their fiscal rules to gain additional fiscal space to mitigate the social and economic consequences of the health crisis. As a result, the return and subsequent compliance with fiscal rules have been compromised, and the opportunity to improve them and consider the new global macroeconomic conditions has emerged. Understanding what elements relate to increased compliance with the rules and what has worked and has not can shed light on upcoming reforms. This paper uses an empirical model to investigate Latin American countries' factors influencing numerical compliance with fiscal rules. We 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 are associated with higher levels of compliance. 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: Compliance; Fiscal rules; Latin America (search for similar items in EconPapers)
Date: 2022-08
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-03788589
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://amu.hal.science/hal-03788589/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-03788589

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().