Does the quality of public finance enhance fiscal discipline in the European Union? A cross-country analysis

The concept of Quality of Public Finance has become of high importance over time. It focuses on the role that public finance and fiscal policy can play to sustain economic growth, employment and competitiveness in the context of European strategy (Lisbon strategy and, now, Europe 2020). Stemming from a normative and theoretical framework we built a questionnaire to make an assessment of the Quality of Public Finance disclosure offered by a series of selected European Union members in their Stability and Convergence Programmes, released in 2007, 2009 and 2011. The empirical research allows us to identify an index to evaluate the fairness and reliability of the Quality of Public Finance disclosure provided by the European countries. The Quality of Public Finance disclosure does not appear satisfactory since any country goes beyond the index average, even though a tendency towards an enhancement emerged in 2011, also enforced by the launch of the European Semester. The correlation analysis showed a weak but positive relation between Quality of Public Finance disclosure and structural deficit.