Vertical effects of fiscal rules: the Swiss experience
| Autor: | Lars P. Feld, Heiko T. Burret |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Macroeconomics
Economics and Econometrics Government media_common.quotation_subject 05 social sciences jel:H74 jel:H60 jel:H72 jel:H77 Decentralization 0506 political science Spillover effect Accounting Debt 0502 economics and business 050602 political science & public administration Economics 050207 economics Robustness (economics) Finance Budget constraint fiscal rules vertical effects fiscal shocks decentralization sub-national finances Panel data Public finance media_common |
| Zdroj: | International Tax and Public Finance. 25:673-721 |
| ISSN: | 1573-6970 0927-5940 |
| DOI: | 10.1007/s10797-017-9467-y |
| Popis: | Formal fiscal rules have been introduced in many countries throughout the world. While most studies focus on the intra-jurisdictional effects of fiscal rules, vertical effects on the finances of other levels of government have yet to be explored thoroughly. From a theoretical point of view, vertical effects could work in opposite directions, i.e., improve and burden other levels’ finances. This paper is the first formally investigating the influence of Swiss debt brakes, which primarily target the cantonal level, on municipal finances. A difference-in-differences estimation (two-way fixed effects) of aggregated and disaggregated local panel data provides unique evidence that suggests little effect of budget constraints at the cantonal level on average municipal finances and fiscal decentralization. The results are confirmed by a wide range of robustness tests. If anything, cantonal debt brakes are associated with improved local finances and fiscal centralization. These findings run counter to popular fears and emphasize the possibility of positive spillover effects of fiscal rules. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|
Full text from SpringerLink