Balanced budget rules and fiscal outcomes: Evidence from historical constitutions

• 成果类型: Article
• 署名作者: Asatryan, Zareh; Castellon, Cesar; Stratmann, Thomas
• 署名单位: Leibniz Association; Zentrum fur Europaische Wirtschaftsforschung (ZEW); Clemson University; George Mason University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.09.001
• 发表日期: 2018
• 页码: 105-119
• 关键词: Economic effects of constitutions; fiscal rules; Historical public finances; Sovereign debt crises

摘要

This paper studies the reduced-form effects of constitutional-level balanced budget rules (BBRs) on fiscal outcomes. Using historical data for a large set of countries dating back to the nineteenth century and applying a difference-in-difference design we find that the introduction of a constitutional BBR leads to a reduced probability of experiencing a sovereign debt crisis. We estimate that debt-to-GDP ratio decreases by around eleven percentage points on average, most of these consolidation being explained by decreasing expenditures rather than increasing tax revenues. Using the same methodology and sample, we do not find evidence that non-constitutional BBRs included in national legislation affect these variables. Additional estimates gained from applying the synthetic control method on nine selected case study countries in Africa, Europe, and Latin America are consistent with the main findings, but also highlight the importance of country specific circumstances when evaluating the success of BBRs. (C) 2018 Elsevier B.V. All rights reserved.