The past and future of subnational fiscal rules: An analysis of fiscal rules over time

Pietrangelo de Biase and Sean Dougherty

No 41, OECD Working Papers on Fiscal Federalism from OECD Publishing

Abstract: Fiscal rules are increasingly used at state and local levels to promote fiscal sustainability in OECD countries. Following the Global Financial Crisis, multiple reforms to fiscal rule frameworks were made so that governments could better tackle crises and build buffers for future downturns. This paper examines recent trends in the adoption of fiscal rules across levels of government and empirically assesses their effects with the purpose of providing lessons for the post-COVID-19 period. Beyond addressing the deterioration in public finances after the pandemic, the challenges include addressing the impact of population ageing, climate change and the energy transition, as well as growing regional inequalities. Evolution of the rules employed at the central level are contrasted to those at the subnational levels, including design features and institutional elements, together with their goals and limitations.

Keywords: budgetary management; fiscal federalism; fiscal frameworks; independent fiscal institutions; stabilisation policy (search for similar items in EconPapers)
JEL-codes: E63 H61 H72 (search for similar items in EconPapers)
Date: 2022-10-18
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:ctpaab:41-en

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