The Role of Fiscal Rules in Determining Fiscal Performance

Fiscal Rules Conference, p. 237, 2001

30 Pages Posted: 28 Jun 2012

See all articles by Suzanne Kennedy

Suzanne Kennedy

Ministry of Finance - Canada

Janine Robbins

Government of Canada - Department of Finance Canada

François Delorme

Ministry of Finance - Canada

Date Written: February 1, 2001

Abstract

Kennedy, Robbins and Delorme examine the importance of fiscal rules in determining budgetary outcomes. After briefly reviewing the rationale for rules, the paper compares the rules introduced in several countries at the national and subnational levels. It notes that while several countries have introduced restrictions on deficit, debt, tax and expenditure levels, some countries have focused their efforts on increasing transparency and accountability in the conduct of fiscal policy. Kennedy, Robbins and Delorme also evaluate the evidence about the impact of rules in terms of budgetary consolidation in the 1990s. The evidence indicates that both countries with rules and countries without rules implemented successful fiscal adjustments. From this, the authors conclude that rules may be helpful in achieving fiscal consolidation and may even be necessary in certain countries, but they are clearly not necessary in all countries. They also find that empirical studies of fiscal rules generally support this conclusion. However, determining the conditions under which fiscal rules are indeed necessary to ensure fiscal discipline remains an area for further research.

Suggested Citation

Kennedy, Suzanne and Robbins, Janine and Delorme, François, The Role of Fiscal Rules in Determining Fiscal Performance (February 1, 2001). Fiscal Rules Conference, p. 237, 2001. Available at SSRN: https://ssrn.com/abstract=2094473 or http://dx.doi.org/10.2139/ssrn.2094473

Suzanne Kennedy (Contact Author)

Ministry of Finance - Canada ( email )

140 O'Connor, L'Esplanade Laurier
East Tower, 20th floor
Ottawa, K1A 0G5
Canada

Janine Robbins

Government of Canada - Department of Finance Canada ( email )

François Delorme

Ministry of Finance - Canada ( email )

140 O'Connor, L'Esplanade Laurier
East Tower, 20th floor
Ottawa, K1A 0G5
Canada

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