IESET.
Hypotheses·institutional quality·constitutional_fiscal_rules_growth_stability

Across advanced and emerging-market economies 1980-2020, constitutional or statutory fiscal rules — debt brakes, deficit ceilings, and expenditure-growth limits — predict more durable prosperity (lower growth volatility and stronger long- run income growth) than discretionary state-investment surges.

The pre-registered claim is that countries with binding fiscal rules in place for at least 10 years show at least 0.8 percentage points lower standard deviation of GDP growth and at least 0.3 percentage points higher mean growth over 1980- 2020 than matched peers without such rules, after controlling for initial income, resource dependence, and financial development.

INCONCLUSIVEengine/runs/constitutional_fiscal_rules_growth_stability

INCONCLUSIVE_DATA_PENDING — treatment 'binding_fiscal_rule_dummy' has no within-country variation under country fixed effects

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

This test cannot make a firm call yet. treatment 'binding_fiscal_rule_dummy' has no within-country variation under country fixed effects

why it matters

This matters because institutional quality claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 55 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Binding fiscal rule dummy
  • Discretionary state investment surge
What we checked
  • Income growth volatility
  • Real income per capita growth
  • Long run prosperity index
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/constitutional_fiscal_rules_growth_stability
1007550250198020002020USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show gdp_growth_volatility across 55 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for constitutional_fiscal_rules_growth_stability. Published chart will be generated from engine/runs/constitutional_fiscal_rules_growth_stability/chart_data.json.

Who has skin in the game — schools predicting on this

9 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if MIXEDpartial/no-callChicago School Monetarismwins if MIXEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-callStructuralist / Developmentalistwins if MIXEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if SUPPORTEDpartial/no-callNew Institutional Economicswins if SUPPORTEDpartial/no-callNew Keynesian (mainstream synthesis)wins if MIXEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callSocial Democraticwins if MIXEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:53:16Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across advanced and emerging-market economies 1980-2020, constitutional or statutory fiscal rules — debt brakes, deficit ceilings, and expenditure-growth limits — predict more durable prosperity (lower growth volatility and stronger long- run income growth) than discretionary state-investment surges. The pre-registered claim is that countries with binding fiscal rules in place for at least 10 years show at least 0.8 percentage points lower standard deviation of GDP growth and at least 0.3 percentage points higher mean growth over 1980- 2020 than matched peers without such rules, after controlling for initial income, resource dependence, and financial development.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the coefficient on binding fiscal rule is not negative and significant at p<0.05 on growth volatility, OR (b) the mean growth difference between rule-bound and non- rule-bound countries is below 0.15 pp/year, OR (c) the discretionary-investment-surge coefficient is positive and significant on long-run prosperity (suggesting discretion outperforms rules). A Keynesian / counter-cyclical-fiscal reading wins if (c) holds or if fiscal rules are associated with lower growth (austerity drag).

formal test & threshold
test:      panel_fe_fiscal_rules_vs_discretionary_investment_on_prosperity
threshold: panel_FE_beta(binding_fiscal_rule → growth_volatility) < 0 at p<0.05 AND mean_growth_rule_bound − mean_growth_no_rule >= 0.30 pp/yr AND discretionary_surge_coefficient NOT > prosperity_index at p<0.10

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
55 countries · 1980 – 2020
Evidence type
associational

Panel FE comparing rule-bound vs non-rule-bound country-years on growth volatility and mean growth. Matching estimator as robustness: propensity-score matching on initial income, resource dependence, and financial development. Event-study around fiscal-rule adoptions (e.g. Germany Schuldenbremse 2009, Switzerland debt brake 2003, Sweden surplus target 1997) with synthetic control. Robustness: exclude EU countries (where rules may be EU-imposed rather than domestically chosen); exclude commodity exporters.

Data

VariableSourceTransform
gdp_growth_volatility
outcome
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
rolling_sd_10yr
real_gdp_per_capita_growth
outcome
world_bank_wdi:NY.GDP.PCAP.KD.ZGtier 2
level
long_run_prosperity_index
outcome
constructed:mean_growth_minus_volatilitytier 5
level
binding_fiscal_rule_dummy
treatment
constructed:imf_fiscal_rules_database + national_legislationtier 5
indicator
discretionary_state_investment_surge
treatment
constructed:public_investment_above_trend_plus_3sdtier 5
indicator
public_investment_share_gdp
treatment
world_bank_wdi:NE.GDI.FTOT.ZStier 2
level
log_initial_gdp_pc
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
natural_resource_rents
control
world_bank_wdi:NY.GDP.TOTL.RT.ZStier 2
level
financial_development
control
world_bank_wdi:FS.AST.PRVT.GD.ZStier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
human_capital_index
control
pwt:hctier 3
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — constitutional_fiscal_rules_growth_stability

Verdict: INCONCLUSIVE_DATA_PENDING — treatment 'binding_fiscal_rule_dummy' has no within-country variation under country fixed effects

Pre-registration

  • Claim: Across advanced and emerging-market economies 1980-2020, constitutional or statutory fiscal rules — debt brakes, deficit ceilings, and expenditure-growth limits — predict more durable prosperity (lower growth volatility and stronger long- run income growth) than discretionary state-investment surges. The pre-registered claim is that countries with binding fiscal rules in place for at least 10 years show at least 0.8 percentage points lower standard deviation of GDP growth and at least 0.3 percentage points higher mean growth over 1980- 2020 than matched peers without such rules, after controlling for initial income, resource dependence, and financial development.
  • Falsification rule: Not supported if (a) the coefficient on binding fiscal rule is not negative and significant at p<0.05 on growth volatility, OR (b) the mean growth difference between rule-bound and non- rule-bound countries is below 0.15 pp/year, OR (c) the discretionary-investment-surge coefficient is positive and significant on long-run prosperity (suggesting discretion outperforms rules). A Keynesian / counter-cyclical-fiscal reading wins if (c) holds or if fiscal rules are associated with lower growth (austerity drag).
  • Falsification test: panel_fe_fiscal_rules_vs_discretionary_investment_on_prosperity

Estimate

  • Error: treatment 'binding_fiscal_rule_dummy' has no within-country variation under country fixed effects

Variables resolved

  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → gdp_growth_volatility (outcome, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:NY.GDP.PCAP.KD.ZG → real_gdp_per_capita_growth (outcome, publisher=world_bank_wdi, n=13897)
  • constructed: imf_fiscal_rules_database + national_legislation → binding_fiscal_rule_dummy (treatment, publisher=constructed, n=2255)
  • constructed: public_investment_above_trend_plus_3sd → discretionary_state_investment_surge (treatment, publisher=constructed, n=2255)
  • world_bank_wdi:NE.GDI.FTOT.ZS → public_investment_share_gdp (treatment, publisher=world_bank_wdi, n=9870)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_initial_gdp_pc (controls, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NY.GDP.TOTL.RT.ZS → natural_resource_rents (controls, publisher=world_bank_wdi, n=11504)
  • world_bank_wdi:FS.AST.PRVT.GD.ZS → financial_development (controls, publisher=world_bank_wdi, n=9562)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • pwt:hc → human_capital_index (controls, publisher=pwt, n=8637)

Variables missing data

  • constructed: mean_growth_minus_volatility (outcome, name=long_run_prosperity_index) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:16+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

IMF Fiscal Rules Database 2022 is the primary source for rule identification. EU Fiscal Rules Database provides detail for European members. National legislation verification is required for bindingness coding. Discretionary-investment-surge identification uses IMF WEO and WDI public-investment series.

Authored framework. Read the transparency note.