Abstract
ABSTRACTDe jure fiscal rules have known a rapidly increasing popularity worldwide. This paper aims at analysing their spatial diffusion in 108 countries over the period 2001–2015 using a pooled version of the Bayesian SAR probit model. Using two different types of weighting (geographic proximity and bilateral trade) and desegregating the results for specific rules, I find a significant and positive spatial lag in line with the imitation (strategic complementarity) hypothesis. Rational imitation, deriving from a race to fiscal credibility, is preferred over the blind imitation hypothesis as the mimetic behaviour is revealed only in countries facing weaker fiscal reputation.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have