A toolkit to strengthen government budget surveillance

Diego J. Pedregal (), Javier Pérez and A. Jesúss Sánchez-Fuentes ()
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Diego J. Pedregal: U. Castilla la Mancha
A. Jesúss Sánchez-Fuentes: U. Complutense de Madrid

No 1416, Working Papers from Banco de España

Abstract: In this paper we develop a comprehensive short-term fiscal forecasting system of use for the real-time monitoring of the Spanish government’s borrowing requirement. Spain has been at the centre of the recent European sovereign debt crisis, not least because of sizeable failures in meeting public deficit targets. The system comprises a suite of models, with different levels of disaggregation (bottom-up vs top-down; general government vs sub-sectors), which are suitable for the automatic processing of the large amount of monthly/quarterly fiscal data currently published by the Spanish statistical authorities. Our tools are instrumental in the ex-ante detection of risks to official projections, and can thus help reduce the ex-post reputational costs of budgetary slippage. On the basis of our results, we discuss how official monitoring bodies could expand, on one hand, their toolkit to evaluate regular adherence to targets (moving beyond a legalistic approach) and, on the other, their communication policies as regards sources of risks to (ex-ante) compliance with budgetary targets.

Keywords: government accountability; transparency; fiscal Forecasting. (search for similar items in EconPapers)
JEL-codes: C3 C82 E62 E65 H6 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2014-07
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1416

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