02061cas a2200253 a 4500 AALejournalIMF016101 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513523736 1018-5941 BD-DhAAL BD-DhAAL Eklou, Kodjovi. Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle? / Kodjovi Eklou, Marcelin Joanis. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper estimates the causal effect of fiscal rules on political budget cycles in a sample of 67 developing countries over the period 1985-2007. We exploit the geographical pattern in the adoption of fiscal rules to isolate an exogenous source of variation in the adoption of national fiscal rules. Based on a diffusion argument, we use the number of other countries in a given subregion that have fiscal rules in place to predict the probability of having them at the country level. We find that in election years with fiscal rules in place, public consumption is reduced by 1.6 percentage point of GDP as compared to election years without these rules. This impact is equivalent to a reduction by a third of the volatility of public consumption in our sample. Furthermore, the effectiveness of these rules depends on their type, their institutional design, whether they have been in place for a long time and finally on the degree of competitiveness of elections. Mode of access: Internet Joanis, Marcelin. IMF Working Papers; Working Paper ; No. 2019/291 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/291/001.2019.issue-291-en.xml IMF e-Library