TY - JOUR N2 - The objective of this paper is to derive the characteristics of an effective governance framework ensuring incentives for conducting a prudent fiscal policy.We study this problem with the use of econometric tools and a sample of 28 European Union Member States between 2003 and 2017. By looking at specific reforms and measures, not only we verify the synthetic effectiveness of fiscal constraints but also we analyse specific elements of the governance framework.Our study shows that fiscal balances are affected not only by the economic cycle, but, among others, by the level of public debt and its cost. We find that the existence of numerical fiscal rules, in that specifically revenue and expenditures rules, their strong legal entrenchment, surveillance mechanisms, sanctions, and flexibility with respect to business cycle have a significant impact on curbing deficits. L1 - http://journals.pan.pl/Content/114894/PDF-MASTER/mainFile.pdf L2 - http://journals.pan.pl/Content/114894 PY - 2019 IS - No 4 EP - 215 DO - 10.24425/cejeme.2019.131537 KW - fiscal effort KW - fiscal rules KW - cyclically-adjusted balance KW - fiscal governance A1 - Poniatowski, Grzegorz PB - Oddział PAN w Łodzi DA - 2019.12.16 T1 - Enhancing Prudent Fiscal Policy SP - 199 UR - http://journals.pan.pl/dlibra/publication/edition/114894 T2 - Central European Journal of Economic Modelling and Econometrics ER -