Suchergebnisse

As the basis for a European regime for resolving failing and failed banks, the European Commission has proposed the Bank Resolution and Recovery Directive (BRRD) and a regulation establishing a European Single Resolution Mechanism (SRM) and a Single Bank Resolution Fund (SBRF). There is a debate about which parts of the proposed SRM-SBRF to add to the BRRD. The BRRD sets out a resolution toolkit that can be used by national resolution authorities. The SRM would involve European institutions more at the expense of national resolution authorities. This change could affect resolution outcomes. Domestic resolution authorities might be more generous than supranational authorities in providing assistance to banks. A supranational approach might be more effective in minimising costs for taxpayers. But regardless of the final design, more attention is needed to ensure that resolution authorities are politically independent from governments. When public support is provided to failed institutions it should come from a bankfunded resolution fund. This would reduce taxpayers' direct costs, and would make banks less likely to take risks and advocate for bailouts.

The recent financial crisis has initiated pressures for not only policy reform but also fundamental institutional fiscal reforms. This paper explores the connection between economic crises and fiscal institutional reforms in a region that has experienced plenty of both in recent years, namely Latin America. For that purpose it reviews the literature and provides five hypotheses about why, and under what circumstances, crises would promote reforms. The empirical evidence shows that debt crises make reforms more likely but banking crises on their own, if anything, reduce the pressure for fiscal institutional reforms. Political institutions are also important. If the electoral system encourages the personal vote, the country is more likely to reform. This evidence may become useful for predicting the likelihood of reforms in the developed world.

AbstractThis 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.

Recent scholarship on budgeting in Latin American and Caribbean (LAC) countries indicates that political institutions impact the level of budget discipline. Building upon this previous research, we argue that the principal problem that must be addressed in both the government and the legislature to insure strong fiscal discipline is the common pool resource (CPR) problem. At the cabinet level, the CPR problem arises because ministers consider the implications of decisions on their ministries only. The level of the CPR problem in the legislature depends upon the electoral system. Using a data set of LAC countries for the period 1988–97, we find that executive power in the budget process is most effective in reducing budget deficits when electoral incentives for the personal vote is high in the legislature, while strengthening the president (or prime minister) in countries where the personal vote is low in the legislature has no effect.

Recent scholarship on the impact of fiscal institutions on budgeting outcomes in Latin American and Caribbean (LAC) countries indicates that political institutions impact the level of budget discipline. BuiIding upon this previous research, we argue that the principle problem that must be addressed to insure strong fiscal discipline is the common pool resource (CPR) problem. The source of the problem, as well as its solution, differ in the government and in the legislature. At the cabinet level, the CPR problem arises because ministers consider the spending and tax implications of decisions on their ministries (only) instead of on the general population. As Hallerberg and von Hagen (1999) indicate, the appropriate solution at the cabinet level depends upon the coalition structure of the government. Given that all LAC countries have either presidential or oneparty parliamentary systems, a strong central player like the finance minister can reduce the CPR problem at the cabinet level. A similar strengthening of the executive vis-à-vis the legislature, in contrast, does not necessarily lead to tighter fiscal discipline. The level of the CPR problem in the legislature depends upon the type of electoral system. If states have open list proportional representation systems, then increases in district magnitude increase the problem, while under closed lists increases in district magnitude decrease the problem. Using a data set of LAC countries for the period 1988-97 and following Carey and Shugart (1995), we create an index for the incentives for the personal vote. We find that executive power in the budget process is most effective in reducing budget deficits when the personal vote is high in the legislature, while strengthening the president (or prime minister) in countries where the personal vote is low in the legislature has no statistically significant effect. This finding has practical implications for the design of fiscal institutions in LAC countries—granting the executive a privileged position vis-à-vis the legislature has beneficial effects on the budget balance only when the CPR problem in the legislature is large. Moreover, an alternative institutional change is to reform a country's electoral system. The second option may be more feasible in countries where legislators are unlikely to give the president more power, or where dictatorial pasts make populations wary of granting the executive too much authority on any policy area.