Fiscal pro-cyclicality is a defining trait of many MENA countries and other emerging economies: public spending typically rises in good times and falls in bad times. This column reports research on the effectiveness of fiscal rules in countering this widespread tendency. The evidence from 120 countries over a 30-year period indicates that rules on government expenditure can reduce the pro-cyclicality of public spending by around 40% on average.
Raimundo SotoCatholic University, Chile
Raimundo Soto is associate professor of economics, Pontificia Universidad Católica de Chile. He received his PhD in economics from Georgetown University. He specializes in macroeconomic theory and econometrics and has published extensively in international journals covering long-run growth, exchange rate misalignment, and monetary policy, as well as corruption, resource curse, institutions, and fiscal policy. His most recent book is The Economy of Dubai published by Oxford University Press in 2016.