Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? write by Kodjovi M. Eklou. This book was released on 2019-12-27. Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? available in PDF, EPUB and Kindle. This paper estimates the causal effect of fiscal rules on political budget cycles in a sample of 67 developing countries over the period 1985–2007. We exploit the geographical pattern in the adoption of fiscal rules to isolate an exogenous source of variation in the adoption of national fiscal rules. Based on a diffusion argument, we use the number of other countries in a given subregion that have fiscal rules in place to predict the probability of having them at the country level. We find that in election years with fiscal rules in place, public consumption is reduced by 1.6 percentage point of GDP as compared to election years without these rules. This impact is equivalent to a reduction by a third of the volatility of public consumption in our sample. Furthermore, the effectiveness of these rules depends on their type, their institutional design, whether they have been in place for a long time and finally on the degree of competitiveness of elections.
Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle?
Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? write by Kodjovi M. Eklou. This book was released on 2019-12-27. Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? available in PDF, EPUB and Kindle. This paper estimates the causal effect of fiscal rules on political budget cycles in a sample of 67 developing countries over the period 1985–2007. We exploit the geographical pattern in the adoption of fiscal rules to isolate an exogenous source of variation in the adoption of national fiscal rules. Based on a diffusion argument, we use the number of other countries in a given subregion that have fiscal rules in place to predict the probability of having them at the country level. We find that in election years with fiscal rules in place, public consumption is reduced by 1.6 percentage point of GDP as compared to election years without these rules. This impact is equivalent to a reduction by a third of the volatility of public consumption in our sample. Furthermore, the effectiveness of these rules depends on their type, their institutional design, whether they have been in place for a long time and finally on the degree of competitiveness of elections.
Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy
Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy write by Francesca G Caselli. This book was released on 2019-03-05. Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy available in PDF, EPUB and Kindle. This paper estimates the causal effect of fiscal rules on fiscal balances in a panel of 142 countries over the period 1985-2015. Our instrumental variable strategy exploits the geographical diffusion of fiscal rules across countries. The intuition is that reforms in neighboring countries may affect the adoption of domestic reforms through peer pressure and imitational effects. We find that fiscal rules correlate with lower deficits, but the positive link disappears when endogeneity is correctly addressed. However, when considering an index of fiscal rules’ design, we show that well-designed rules have a statistically significant impact on fiscal balances. We conduct several robustness tests and show that our results are not affected by weak instrument problems.
Do Fiscal Rules Constrain Political Budget Cycles?
Do Fiscal Rules Constrain Political Budget Cycles? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Do Fiscal Rules Constrain Political Budget Cycles? write by Bra Gootjes. This book was released on 2019. Do Fiscal Rules Constrain Political Budget Cycles? available in PDF, EPUB and Kindle.
Fiscal Rules and Discretion Under Persistent Shocks
Fiscal Rules and Discretion Under Persistent Shocks - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Fiscal Rules and Discretion Under Persistent Shocks write by Marina Halac. This book was released on 2012. Fiscal Rules and Discretion Under Persistent Shocks available in PDF, EPUB and Kindle. This paper studies the optimal level of discretion in policymaking. We consider a fiscal policy model where the government has time-inconsistent preferences with a present-bias towards public spending. The government chooses a fiscal rule to trade off its desire to commit to not overspend against its desire to have flexibility to react to privately observed shocks to the value of spending. We analyze the optimal fiscal rule when the shocks are persistent. Unlike under i.i.d. shocks, we show that the ex-ante optimal rule is not sequentially optimal, as it provides dynamic incentives. The ex-ante optimal rule exhibits history dependence, with high shocks leading to an erosion of future fiscal discipline compared to low shocks, which lead to the reinstatement of discipline. The implied policy distortions oscillate over time given a sequence of high shocks, and can force the government to accumulate maximal debt and become immiserated in the long run.
