The Design of Fiscal Rules and Forms of Governance in European Union Countries

38 Pages Posted: 13 Dec 2004

See all articles by Mark Hallerberg

Mark Hallerberg

Emory University - Department of Political Science

Rolf Strauch

European Central Bank (ECB)

Jürgen von Hagen

University of Bonn - Institute of Economic Policy; Centre for Economic Policy Research (CEPR)

Date Written: December 2004

Abstract

This paper examines the development of fiscal rules and budget procedures in EU countries, and their impact of public finances since the mid-1980s. It presents a new data set on institutional reforms and their impact in Europe. Empirical pattern confirm our prediction that more stringent fiscal rules exist under large coalition governments, while the centralisation of budgetary procedures is the main form of fiscal governance elsewhere. In addition, the centralisation of procedures does not restrain public debt in countries more prone to a rules-based approach, whereas more stringent fiscal rules seem to support fiscal discipline in almost all EU countries.

Keywords: public indebtedness, budgetary procedures, fiscal rules, European public finances

JEL Classification: H11, H61, H62

Suggested Citation

Hallerberg, Mark and Strauch, Rolf and von Hagen, Jürgen, The Design of Fiscal Rules and Forms of Governance in European Union Countries (December 2004). ECB Working Paper No. 419. Available at SSRN: https://ssrn.com/abstract=617812

Mark Hallerberg (Contact Author)

Emory University - Department of Political Science ( email )

Atlanta, GA 30322
United States

Rolf Strauch

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Jürgen Von Hagen

University of Bonn - Institute of Economic Policy ( email )

Adenauerallee 24
D-53113 Bonn
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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