Do Balanced Budget Laws Matter in Recessions?

Since the mid-1990s, most Canadian provinces have enacted balanced budget laws (BBLs). Critics
argue that these laws are empty political gestures that are ignored during economic slowdowns. We
consider BBLs in the Canadian provinces from 1981 to 2013 and find that provinces with stronger rules
had better deficit and debt records overall. Recessions make it more difficult to achieve positive
outcomes, but we find no obvious difference between the effects of BBLs during normal economic
conditions and “bad times”. We conclude with suggestions for how the design of BBLs could take
better account of jurisdiction-specific business cycles.

Friday, October 7
River Building Room 5208
12:00 – 1:00 p.m.

Haizhen Mou‘s primary research interests include health care financing and expenditure, cost and efficiency
of public sectors, and government budget management, often from a political economy perspective. She is also
interested in the policy implication of the new measurements of happiness and well-being. She received a
SSHRC grant and several other awards. Her main teaching responsibilities include Public Finance and
Quantitative Research Method for graduate students. She has supervised five Ph.D. or MPP students and served
on numerous graduate thesis committees. She volunteered as a board member for a local non-profit
organization focusing on seniors.