Incentive Effects of Fiscal Rules on the Finance Minister's Behaviour: Evidence from Revenue Projections in Swiss Cantons

Predicting available tax revenue accurately is a key step of fiscal policy. It has recently been shown that revenue prediction errors have a direct impact on fiscal deficits. In the current paper we explore the relationship between the ideology of the finance minister and tax revenue projection errors and assess how the stringency of fiscal rules does alter this relationship. We use a panel dataset on 26 Swiss cantons over the period 1980-2007 as well as a new dataset on 99 finance ministers at the cantonal level. We find a rather counter-intuitive positive relationship between the ideology of the finance minister and tax revenue projection errors in the sense that a more left wing finance minister produces relatively more conservative forecasts. We also find that fiscal rules reduce the effect of ideology on tax revenue projection errors. These results suggest that left wing finance ministers need to curb deficits relatively more in order to signal the same level of competence than a right wing finance minister to the voters. It also suggests that fiscal rules render the signal less informative to the voters and thereby reduce the incentive for left wing finance ministers to be more conservative in their projections

Overlapping political budget cycles in the legislative and the executive

We advance the literature on political budget cycles by testing separately for cycles in expenditures for elections in the legislative and the executive. Using municipal data, we can separately identify these cycles and account for general year effects. For the executive branch, we show that it is important whether the incumbent re-runs. To account for the potential endogeneity associated with this decision, we apply a unique instrumental variables approach based on age and pension eligibility rules. We find sizable and significant effects in expenditures before council elections and before joint elections when the incumbent re-runs

Curriculum in early childhood education: critical questions about content, coherence, and control

A continuing struggle over curriculum in early childhood education is evident in contemporary research and debate at national and international levels. This reflects the dominant influence of developmental psychology in international discourses, and in policy frameworks that determine approaches to curriculum, pedagogy, and assessment. Focusing on early childhood education, we argue that this struggle generates critical questions about three significant themes within curriculum theory: content, coherence, and control. We outline two positions from which these themes can be understood: Developmental and Educational Psychology and contemporary policy frameworks. We argue that within and between these positions, curriculum content, coherence, and control are viewed in different and sometimes oppositional ways. Following this analysis, we propose that a focus on ‘working theories’ as a third position offers possibilities for addressing some of these continuing struggles, by exploring different implications for how content, coherence, and control might be understood. We conclude that asking critical questions of curriculum in early childhood education is a necessary endeavour to develop alternative theoretical frameworks for understanding the ways in which curriculum can be considered alongside pedagogy, assessment, play, and learning

Price Convergence in the Enlarged Internal Market

In this paper we investigate the effects of EU enlargement on price convergence. The internal market is expected to boost integration and increase efficiency and welfare through a convergence of prices in product markets. Two principal drivers are crucial to explain price developments. On the one hand, higher competition exerts a downward pressure on prices because of lower mark ups. On the other hand, the catching up process of low income countries leads to a rise in the price levels and higher inflation over a transition period. Using comparative price levels for 41 product categories price convergence can be established. However, the speed of convergence is rather slow, with half lives around 10 years. The enlargement has slightly stimulated convergence towards the mean price, and this impact is robust across different groups of countries. Moreover, the driving forces of convergence are explored. In line with theoretical predictions, the rise in competition exerts a downward pressure on prices, while catching up of low income countries leads to a rise in price levels and higher inflation. The findings have important implications, as price convergence facilitates the working of common economic policies