## Expenditure Rules: Effective Tools for Sound Fiscal Policy?

_IMF Working Papers, February 12, 2015_

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**Canonical URL:** [Expenditure Rules: Effective Tools for Sound Fiscal Policy?](https://www.imf.org/en/publications/wp/issues/2016/12/31/expenditure-rules-effective-tools-for-sound-fiscal-policy-42706)

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## Bibliographic details
- Authors: Till Cordes, Tidiane Kinda, Priscilla S Muthoora
- Published: February 12, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498390576.001

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### Summary
- This paper provides new evidence on the effectiveness of expenditure rules.
- The analysis is based on a unique dataset covering all countries with national and supranational fiscal rules, including 33 expenditure rules, between 1985 and 2013.
- Contributions to literature:
  - It is the most comprehensive assessment of compliance with rules and of the potential role of expenditure rules, in particular regarding long-term sustainability.
  - It analyzes whether expenditure rules are associated with changes in public investment and its efficiency.

### Key findings
- Dataset scope:
  - Covers all countries with national and supranational fiscal rules between 1985 and 2013.
  - Includes 33 expenditure rules.
- Main analytical foci:
  - Compliance with fiscal rules.
  - Potential role of expenditure rules for long-term fiscal sustainability.
  - Association between expenditure rules and public investment levels and efficiency.

### Policy implications and considerations
- Expenditure rules are evaluated for their effectiveness as tools for sound fiscal policy, with attention to:
  - Enforcement and compliance mechanisms.
  - Long-term sustainability outcomes.
  - Possible impacts on public investment spending and investment efficiency.
- The paper informs design choices for fiscal frameworks seeking to balance expenditure control with protection of public investment.

### Data, methodology, and scope
- Empirical analysis draws on a unique cross-country dataset of fiscal rules (national and supranational) covering 1985–2013.
- The sample explicitly includes 33 identified expenditure rules.
- The paper assesses compliance behavior, sustainability implications, and relationships with public investment and efficiency.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/expenditure-rules-effective-tools-for-sound-fiscal-policy-42706_