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Assessing the impact of fiscal rules on the cyclicality of government expenditures
https://doi.org/10.32609/0042-8736-2023-5-5-22
Abstract
The paper analyzes the impact of fiscal rules on the cyclicality of non- interest public spending. It is concluded that for both developed and developing countries for 1995—2019 non-interest public spending is procyclical, and having at least one fiscal rule at the national level reduces the procyclicality of spending. The reaction to the introduction of a fiscal rule depends on the existence of institutional conditions for its successful application. The presence and rigidity of the rules are offset by the possible non-compliance with them. Fiscal rules are not a sufficient condition for a counter-cyclical fiscal policy and do not guarantee a solution to the problems of debt burden and stabilization of expenditures. Hardly 22 out of 49 countries that have applied at least one fiscal rule for 5 years and for which data for at least 10 years of non-interest spending are available show counter-cyclical non-interest spending behavior, and only 7 of them managed to reduce their debt burden after the introduction of a system of fiscal restrictions.
About the Authors
A. L. Kudrin
Gaidar Institute for Economic Policy
Russian Federation
Russian Federation
Alexey L. Kudrin
Moscow
I. A. Sokolov
Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Ilya A. Sokolov
Moscow
O. V. Suchkova
Lomonosov Moscow State University
Olga V. Suchkova
Moscow
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For citations:
Kudrin A.L., Sokolov I.A., Suchkova O.V. Assessing the impact of fiscal rules on the cyclicality of government expenditures. Voprosy Ekonomiki. 2023;(5):5-22. (In Russ.) https://doi.org/10.32609/0042-8736-2023-5-5-22
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