Ekonomické rozhľady/Economic Review 4/2022

IMPACT OF THE CONSTITUTIONAL LAW ON BUDGET RESPONSIBILITY ON THE FISCAL POSITION OF THE SLOVAK GOVERNMENT

JAKUB KURILA[1] ─ GABRIEL PROCHÁZKA[2]

https://doi.org/10.53465/ER.2644-7185.2022.4.300-322

 

Abstract: The paper evaluates the effect of the Constitutional Act on Budget Responsibility no. 493/2011 Coll. on the public debt of the Slovak Republic, by comparing the synthetic and real Slovakia, employing the synthetic control method. We examine the behavioral effect of the implementation of the fiscal rule on the government as well as the parliament. Based on the model we have estimated, we construct a contrafactual indebtedness of the Slovak government and we compare it with the observed indebtedness after the law of Budget Responsibility has been implemented. We are contributing to the literature by employing a similar approach as Salvi, Schaltegger, and Schmid (2020) did for Switzerland with the empirical evidence for the Slovak republic. Our analysis indicates that the effect of the Constitutional Act on the budget responsibility in Slovakia, measured by the public debt, was observed in our analysis, but remained statistically insignificant in the contrafactual period.

Keywords: public debt, budget responsibility rule, Slovakia, synthetic control method.

JEL Classification: K30, H50, H60

Fulltext: PDF

Online publication date: 19 December 2022

 

To cite this article (APA style):

Kurila, J. & Procházka, G. (2022). Impact of the Constitutional Law on Budget Responsibility on The Fiscal Position of the Slovak Government. Ekonomické rozhľady – Economic Review, 51(4), 300 ─ 322. 

https://doi.org/10.53465/ER.2644-7185.2022.4.300-322

 

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

 

[1] Jakub Kurila, University of Economics in Bratislava, Slovak Republic, e-mail: jkurila1@student.euba.sk, orcid id https://orcid.org/0000-0001-6317-6722

[2] Gabriel Procházka, University of Economics in Bratislava, Slovak Republic, e-mail: gprochazka1@student.euba.sk, orcid id https://orcid.org/0000-0002-7459-8661