Fiscal constitutions: The fundamental drivers of intergovernmental fiscal policy

Abstract

Fiscal constitutions contain a set of rules and frameworks, which are usually enshrined in a country’s fundamental laws. Fiscal constitutions guide policy and hence shape outcomes. This chapter describes the empirical approach to assessing the constitutions of 15 federal countries in a comparative way and provides an overview on the most salient results. The chapter first goes more into the details of what is understood by the term fiscal constitutions. The following section then describes the building blocks of constitutions and assesses them empirically using a common coding framework. Section 4 goes on to combine and link the building blocks to characterise specific types of constitutions, i.e. to what extent they are decentralised or integrated. Section 5 then traces the development of the constitutions over time, identifies main trends, and explains the major reforms and their driving forces. Lastly, Section 6 provides basic evidence on the association between types of constitutions and outcomes.