The Determinants of the Structure of Rainy Day Funds

Resumen:
The article discusses a study to evaluate the factors that determine the configuration of budget stabilization funds, also known as rainy day funds, along their two most important dimensions, which are deposit and withdrawal requirements. The findings reveal that political and institutional factors such as the size of the house of the legislature and some strict institutions are associated with weak budget stabilization funds, while economic factors such as the volatility of state tax revenues are associated with stricter funds.