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Fiscal rules and budget forecast errors of Italian municipalities

Matteo Picchio (UGent) and Raffaella Santolini
(2020) EUROPEAN JOURNAL OF POLITICAL ECONOMY. 64.
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Abstract
We study the impact of the domestic stability pact on the accuracy of budget forecasts of Italian municipalities. Identification of the causal effect exploits a quasi-natural experiment generated by the removal in 2001 of the fiscal restraints on budget decisions for municipalities with fewer than 5000 inhabitants and by stricter budgetary restrictions and severe penalties for noncompliers in 2002. We find that relaxing fiscal rules had a sizeable impact on budget forecast errors, especially in 2002. In fact, revenue (expenditure) forecast errors for municipalities with fewer than 5000 inhabitants became 26% (22%) larger than in the past.
Keywords
Political Science and International Relations, Economics and Econometrics, Budget forecast errors, Sub-central fiscal rules, Italian municipalities, Quasi-natural experiment, Difference-in-discontinuities desig, REGRESSION DISCONTINUITY DESIGN, PERFORMANCE, TAX, MANIPULATION, FEDERALISM, DISCIPLINE, COUNTRIES, DEFICITS, ECONOMY, POLICY

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MLA
Picchio, Matteo, and Raffaella Santolini. “Fiscal Rules and Budget Forecast Errors of Italian Municipalities.” EUROPEAN JOURNAL OF POLITICAL ECONOMY, vol. 64, 2020, doi:10.1016/j.ejpoleco.2020.101921.
APA
Picchio, M., & Santolini, R. (2020). Fiscal rules and budget forecast errors of Italian municipalities. EUROPEAN JOURNAL OF POLITICAL ECONOMY, 64. https://doi.org/10.1016/j.ejpoleco.2020.101921
Chicago author-date
Picchio, Matteo, and Raffaella Santolini. 2020. “Fiscal Rules and Budget Forecast Errors of Italian Municipalities.” EUROPEAN JOURNAL OF POLITICAL ECONOMY 64. https://doi.org/10.1016/j.ejpoleco.2020.101921.
Chicago author-date (all authors)
Picchio, Matteo, and Raffaella Santolini. 2020. “Fiscal Rules and Budget Forecast Errors of Italian Municipalities.” EUROPEAN JOURNAL OF POLITICAL ECONOMY 64. doi:10.1016/j.ejpoleco.2020.101921.
Vancouver
1.
Picchio M, Santolini R. Fiscal rules and budget forecast errors of Italian municipalities. EUROPEAN JOURNAL OF POLITICAL ECONOMY. 2020;64.
IEEE
[1]
M. Picchio and R. Santolini, “Fiscal rules and budget forecast errors of Italian municipalities,” EUROPEAN JOURNAL OF POLITICAL ECONOMY, vol. 64, 2020.
@article{8673920,
  abstract     = {{We study the impact of the domestic stability pact on the accuracy of budget forecasts of Italian municipalities. Identification of the causal effect exploits a quasi-natural experiment generated by the removal in 2001 of the fiscal restraints on budget decisions for municipalities with fewer than 5000 inhabitants and by stricter budgetary restrictions and severe penalties for noncompliers in 2002. We find that relaxing fiscal rules had a sizeable impact on budget forecast errors, especially in 2002. In fact, revenue (expenditure) forecast errors for municipalities with fewer than 5000 inhabitants became 26% (22%) larger than in the past.}},
  articleno    = {{101921}},
  author       = {{Picchio, Matteo and Santolini, Raffaella}},
  issn         = {{0176-2680}},
  journal      = {{EUROPEAN JOURNAL OF POLITICAL ECONOMY}},
  keywords     = {{Political Science and International Relations,Economics and Econometrics,Budget forecast errors,Sub-central fiscal rules,Italian municipalities,Quasi-natural experiment,Difference-in-discontinuities desig,REGRESSION DISCONTINUITY DESIGN,PERFORMANCE,TAX,MANIPULATION,FEDERALISM,DISCIPLINE,COUNTRIES,DEFICITS,ECONOMY,POLICY}},
  language     = {{eng}},
  pages        = {{20}},
  title        = {{Fiscal rules and budget forecast errors of Italian municipalities}},
  url          = {{http://doi.org/10.1016/j.ejpoleco.2020.101921}},
  volume       = {{64}},
  year         = {{2020}},
}
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