Impact of fiscal institutions on public finances in the European Union: Review of evidence in the empirical literature

Abstract This paper examines the impact of budgetary institutions on public finances in European Union basis a critical survey relevant theoretical and empirical literature. In general, authors find that fiscal (namely rules) have successfully contributed to greater sustainability, reduced procyclicality policies within EU, increased national ownership rules by strengthening frameworks. A reaction function was one widely used methods determine principal variables affecting outcomes. Some cyclically-adjusted outcomes as dependent variable representing discretionary policy-making whereas others put emphasis other The samples countries covered mostly EU Member States, rather homogenous context common framework. Institutional aspects independent differed significantly among some could be added for future research. Based literature survey, several recommendations were made policy-making.