Fiscal Performance, Institutional Design and Decentralization in European Union Countries

By Luc Eyraud, Anita Tuladhar, Julio Escolano, Marialuz Moreno Badia, Juliane Sarnes

February 1, 2012

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Format: Chicago

Luc Eyraud, Anita Tuladhar, Julio Escolano, Marialuz Moreno Badia, and Juliane Sarnes. Fiscal Performance, Institutional Design and Decentralization in European Union Countries, (USA: International Monetary Fund, 2012) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the impact of decentralization on overall fiscal performance in the European Union, taking into account fiscal institutional arrangements. We find that spending decentralization has been associated with sizably better fiscal performance, especially when transfer dependency of subnational governments is low. However, subnational fiscal rules do not seem to be associated with better performance.

Subject: Expenditure, Fiscal federalism, Fiscal policy, Fiscal rules, Fiscal stance, General government spending, Public financial management (PFM)

Keywords: Access to borrowing, Authorities' access, Central government, Country, Eastern Europe, Europe, European Union, Expenditure share, Fiscal decentralization, Fiscal federalism, Fiscal institutions, Fiscal rules, Fiscal stance, General government spending, Government, Government tier, Lagged government debt, National government, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/045
Stock No:

WPIEA2012045
ISBN:

9781463936464
ISSN:

1018-5941

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