Arbeitspapier
Are Fiscal Adjustments less Successful in Decentralized Governments?
A common political claim is that decentralized governments undermine policy makers' ability to fight fiscal imbalance. This paper examines how different fiscal institutions influence the likeli-hood of a successful fiscal adjustment. Using a panel of the Swiss cantons from 1981 to 2001, we first analyze the episodes of tight fiscal policy and their macroeconomic consequences. Then, we empirically investigate the determinants of successful long-la¬sting deficit reductions. Contrary to the popular claim, we find that fiscal decentralization increases the probability of a successful fiscal consolidation. In addition, the results point to an important role of intergovernmental grants and the circumstances, in particular the size of fiscal imbalance in the years before the consolida-tion in determining a successful adjustment policy. Furthermore, coalition governments and large parliaments less likely implement successful fiscal stabilizations. Finally, there is some weak evidence that spending cuts are more promising in reaching a long-lasting fiscal adjustment than revenue increases.
- Sprache
-
Englisch
- Erschienen in
-
Series: CREMA Working Paper ; No. 2007-06
- Klassifikation
-
Wirtschaft
Policy Objectives; Policy Designs and Consistency; Policy Coordination
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
National Budget; Budget Systems
- Thema
-
Fiscal Adjustment
Consolidation Policy
Fiscal Decentralization
Fiscal Institutions
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Schaltegger, Christoph A.
Feld, Lars P.
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Research in Economics, Management and the Arts (CREMA)
- (wo)
-
Basel
- (wann)
-
2007
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Schaltegger, Christoph A.
- Feld, Lars P.
- Center for Research in Economics, Management and the Arts (CREMA)
Entstanden
- 2007
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