Rules-Based Fiscal Policy in France, Germany, Italy, and Spain

By Teresa Daban Sanchez, Steven A. Symansky, Gian M Milesi-Ferretti, Enrica Detragiache, Gabriel Di Bella

November 14, 2003

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Teresa Daban Sanchez, Steven A. Symansky, Gian M Milesi-Ferretti, Enrica Detragiache, and Gabriel Di Bella. Rules-Based Fiscal Policy in France, Germany, Italy, and Spain, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Summary

Fiscal rules can help to counteract the deficits and spending biases that too often originate in the political process. Rules that constrain spending--rather than the balance--allow fiscal policy to be countercyclical. Yet the design of effective spending rules is by no means straightforward. Should a rule be real or nominal? How comprehensive should the definition of spending be? What safeguards ensure the credibility of a rule? How do rules work in decentralized systems where regions and states are partially autonomous? France, Germany, Italy, and Spain--countries that could benefit from more emphasis on fiscal rules to constrain spending--are explored here as case studies.

Subject: Expenditure, Fiscal policy, Fiscal rules, Fiscal stance, Public debt

Keywords: Debt target, Deficit, Expenditure rule, Fiscal policy measure, Fiscal rules, Fiscal stance, OP, Private sector response, Rule, Spending, Spending rule, Western Europe

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Occasional Paper No. 2003/009
Stock No:

S225EA
ISBN:

9781589062160
ISSN:

0251-6365

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