Independent Fiscal Councils: Recent Trends and Performance

Roel Beetsma, Xavier Debrun, Xiangming Fang, Young-Bae Kim, Victor Lledo, Samba Mbaye and Xiaoxiao Zhang

No 2018/068, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; output gap; bond yield; interest rate; independent fiscal councils; fiscal rule compliance; fiscal forecasts; fiscal council; IFC dummy; government effectiveness; absolute value; EU law; council interaction; public finance; Fiscal councils; Fiscal rules; Fiscal stance; Budget planning and preparation; Europe; Global (search for similar items in EconPapers)
Pages: 28
Date: 2018-03-23
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: Independent fiscal councils: Recent trends and performance (2019)
Working Paper: Independent fiscal councils: recent trends and performance (2018)
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