Premium
Fiscal Rules and the Composition of Government Expenditures in OECD Countries
Author(s) -
Dahan Momi,
Strawczynski Michel
Publication year - 2013
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.21694
Subject(s) - economics , government (linguistics) , consumption (sociology) , fiscal policy , transfer payment , sample (material) , monetary economics , public economics , market economy , social science , philosophy , linguistics , chemistry , chromatography , sociology , welfare
Since the 1990s many OECD countries have adopted fiscal rules. After the adoption of these rules, the ratio of social transfers to government consumption substantially declined, and it recovered following the global economic crisis. Using a sample of 22 OECD countries, we found a negative effect of fiscal rules on the ratio of social transfers to government consumption. This finding implies that fiscal rules are effective, but not necessarily binding. Our examination reveals that the negative effect of fiscal rules on the social transfers to government consumption ratio is particularly evident in countries with relatively weak legal protection to social rights.