ORCID
- Litsios, Ioannis: 0000-0003-0895-9817
Abstract
PurposeThe objective of this study is to understand the budgetary role of national legislatures in euro area (EA) countries and to analyse implications for fiscal discipline.Design/methodology/approachBuilding on the budget institutions literature, a legislative budgetary power index for all the 19 euro area (EA) countries is constructed using Organisation for Economic Co-operation and Development (OECD) and European Commission data as well as data generated from questionnaires to national authorities. A two-way fixed effects panel data model is then used to assess the effect of legislative budgetary power on the budget balance in the EA during 2006–2015.FindingsOverall, in the EA, formal legislative powers vis-à-vis the national budgetary process are weak, but there is more legislative involvement in Stability and Growth Pact (SGP) procedures, and legislative budgetary organisational capacity is generally quite good. In contrast to the traditional view in the budget institutions literature, this study’s empirical findings show that strong legislative budgetary power does not necessarily result in larger budget deficits.Research limitations/implicationsData on legislative budgeting were available from different sources, and time series data were very limited.Practical implicationsThere is scope to improve democratic legitimacy of the national budgetary process in the EA, without necessarily jeopardising fiscal discipline.Originality/valueThe constructed legislative budgetary power index covers all the 19 EA countries and has a broad scope covering various novel institutional characteristics. The empirical analysis contributes to the scarce literature on the impact of legislative budgeting on fiscal discipline.
DOI
10.1108/jpbafm-03-2021-0037
Publication Date
2021-10-15
Publication Title
Journal of Public Budgeting Accounting and Financial Management
Volume
33
Issue
5
ISSN
1096-3367
Embargo Period
2023-11-22
Organisational Unit
Plymouth Business School
First Page
635
Last Page
661
Recommended Citation
Catania, M., Baimbridge, M., & Litsios, I. (2021) 'Legislative budgetary power and fiscal discipline in the euro area', Journal of Public Budgeting Accounting and Financial Management, 33(5), pp. 635-661. Available at: https://doi.org/10.1108/jpbafm-03-2021-0037
