Economic, political and institutional determinants of budget deficits in the European Union

Arbeitspapier

Using an extended data set of EU countries ranging from 1971-2006 and relevant econometric methods, we investigate the economic, political, and institutional determinants of government deficits in the EU. The results show a strong opportunistic behaviour of policymakers which leads to political business cycles. We find that political fragmentation does not play a significant role in government deficits. Partisan behaviour has a weak effect. The stability of the government has a significant negative impact on the size of the budget deficit. The paper also shows the significant effects of the Maastricht Treaty on fiscal consolidation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2611

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Fiscal Policy ; International Fiscal Issues; International Public Goods
• Subject: fiscal policy ; European Monetary Union ; Finanzpolitik ; Haushaltsdefizit ; Public Choice ; Europäische Wirtschafts- und Währungsunion ; Konvergenzkriterien ; Politischer Konjunkturzyklus ; Schätzung ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bayar, Ali ; Smeets, Bram
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/26656
• Last update: 10.03.2025, 11:45 AM CET