EVALUATING FISCAL RULES EFFICIENCY IN EUROPEAN UNION COUNTRIES USING DATA ENVELOPMENT ANALYSIS

Global financial crises, which negatively influenced the world economy from 2007 onwards, strongly endangered the macroeconomic stability of the European Union. Still, the convergence criteria agreed in Maastricht in 1992, in terms of monetary and fiscal stability, were not changed. On the other hand, national authorities introduced sets of (fiscal) rules in order to preserve stability. The aforementioned rules were oriented towards macroeconomic stability and, consequently, restoring growth and crisis solving. The aim of the paper is to examine the efficiency of conducting fiscal rules for 28 European Union countries considering the Maastricht criteria as a prerequisite convergence rule. For that purpose the Data Envelopment Analysis (DEA) is used as a mathematical programming method for estimating the relative efficiency of countries given multiple criteria: large deviations from the Maastricht (fiscal) criteria are considered undesirable, while greater GDP growth, revenue in GDP and employment rate are desirable characteristics in terms of chosen macroeconomic indicators. DEA reveals countries that were relatively efficient or inefficient during 2000-2016, how they changed their efficiency over time and variables that can be recognized as the key strength or weakness of a country.