Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper estimates the effect of the Maastricht treaty’s fiscal criterion on the distribution of EU countries’ general government deficits. Using a treatment effects approach, we find that the 3 percent deficit ceiling acts as a “magnet”, increasing the number of observations around the threshold by 20 percent, while reducing the occurrence of both large government deficits and surpluses. Our results imply that the rule had an effect on deficits even when it was not complied with. Country-specific results under the rank invariance assumption indicate that all countries have seen their fiscal position improve on average because of the deficit rule.