ИСТИНА

According to the IMF definition, “a fiscal rule is a long-lasting constraint on fiscal policy through numerical limits on budgetary aggregates… aiming to ensure fiscal responsibility and debt sustainability”. On the one hand, fiscal rules (FR) can reduce the procyclicality of government spending, but on the other hand, contractionary fiscal policies may also dampen GDP growth. Previous estimates fail to account for either the time-varying nature of fiscal procyclicality or cross-country differences in FR adoption. This paper analyzes the impact of fiscal rules on GDP growth and the cyclicality of non-interest public spending in both developed countries and emerging markets from 1995 to 2021, using data from the IMF Fiscal Rules Database. By applying staggered adoption difference-in-differences (DID) estimation, we assess the effects of FRs on GDP growth and spending cyclicality. Our findings indicate that adopting at least one national-level fiscal rule significantly reduces spending procyclicality—a robust result confirmed by both traditional two-way fixed effects (TWFE) and staggered DID methods. While TWFE estimates suggest a negative and significant effect of FRs on GDP growth in emerging markets, these estimates suffer from a "negative weights" problem. In contrast, our staggered DID approach yields a negative but statistically insignificant average treatment effect (ATT = -1.88, 95% CI: [-4.118; 0.431])—both for the full sample and when grouping countries by the year of FR adoption. The key takeaway is that, when using the correct estimation method, there is no trade-off between countercyclicality and GDP growth. Fiscal rule adoption does not lead to a significant slowdown in economic growth.