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Political Power, Fiscal Institutions and Budgetary Outcomes in Central and Eastern Europe

Published online by Cambridge University Press:  25 February 2010

MARK HALLERBERG  and
SAMI YLÄOUTINEN
MARK HALLERBERG
Affiliation:
Hertie School of Governance, Quartier 110 Friedrichstraße 180, Berlin-10117, Germany, email: hallerberg@hertie-school.org
SAMI YLÄOUTINEN
Affiliation:
Finnish Ministry of Finance, Snellmaninkatu 1 A, Helsinki, FI-00023, Finland, email: sami.ylaoutinen@vm.fi
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Abstract

This paper considers the effects of fiscal governance in Central and East European countries 1998–2008. The first part makes predictions about which form of fiscal governance fits which form of government. Under multi-party coalition governments, fiscal contracts where governments make political commitments to multi-annual fiscal plans work well. In countries where two political blocks face off against one another, delegation based around a strong finance ministry should be most effective. The second part examines electoral and party systems, which affect the form of government in place. The third part documents norms, rules, and institutions in place. The final section considers the joint effects of fiscal governance on fiscal outcomes. On balance, the underlying political climate is crucial for determining what types of fiscal norms, institutions, and rules function best. The more countries diverge from their expected form of fiscal governance, the greater the increase in a country's debt burden.

Keywords

budgetary proceduresfiscal rulespublic finances
Type
Research Article
Information
Journal of Public Policy , Volume 30 , Special Issue 1: Performing to Type? Institutional Performance in New EU Member States , April 2010 , pp. 45 - 62
Copyright
Copyright © Cambridge University Press 2010

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