Independent Fiscal Councils: Recent Trends and Performance

By Roel M. W. J. Beetsma, Xavier Debrun, Xiangming Fang, Young-Bae Kim, Victor Duarte Lledo, Samba Mbaye, Xiaoxiao Zhang

March 23, 2018

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Roel M. W. J. Beetsma, Xavier Debrun, Xiangming Fang, Young-Bae Kim, Victor Duarte Lledo, Samba Mbaye, and Xiaoxiao Zhang. Independent Fiscal Councils: Recent Trends and Performance, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Countries increasingly rely on independent fiscal councils to constrain policymakers’ discretion and curb the bias towards excessive deficits and pro-cyclical policies. Since fiscal councils are often recent and heterogeneous across countries, assessing their impact is challenging. Using the latest (2016) vintage of the IMF Fiscal Council Dataset, we focus on two tasks expected to strengthen fiscal performance: the preparation or assessment of forecasts, and the monitoring of compliance with fiscal rules. Tentative econometric evidence suggests that the presence of a fiscal council is associated with more accurate and less optimistic fiscal forecasts, as well as greater compliance with fiscal rules.

Subject: Budget planning and preparation, Fiscal councils, Fiscal policy, Fiscal rules, Fiscal stance, Public financial management (PFM)

Keywords: Absolute value, Bond yield, Budget planning and preparation, Council interaction, EU law, Europe, Fiscal council, Fiscal councils, Fiscal forecasts, Fiscal rule compliance, Fiscal rules, Fiscal stance, Global, Government effectiveness, IFC dummy, Independent fiscal councils, Interest rate, Output gap, Public finance, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/068
Stock No:

WPIEA2018068
ISBN:

9781484348284
ISSN:

1018-5941

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