Dutch Versus Swedish Budgetary Rules: A Comparison

28 Pages Posted: 29 Jun 2012

See all articles by Willem Heeringa

Willem Heeringa

De Nederlandsche Bank

Yngve Lindh

Ministry of Finance

Date Written: February 1, 2001

Abstract

Heeringa and Lindh compare the experience of the Netherlands and Sweden with fiscal rules and procedures. They note that the two countries are relatively small open economies vulnerable to negative external economic developments and have remarkably similar budgetary experience. In both countries, the introduction of budgetary rules has contributed significantly to the recent improvements of the fiscal situation. The Netherlands adopted a trend-based budgetary policy in 1994, after a period of budgetary consolidation which had started in the early 1980s. Sweden implemented new budgetary procedures in 1997, after having suffered the most severe fiscal crisis in the 20th century. In both countries, the introduction of multi-year expenditure ceilings was an important feature of the reforms; they contributed significantly to the recent favourable budgetary developments by strengthening awareness of the long-term. However, some problems of pro-cyclical behaviour have emerged.

Suggested Citation

Heeringa, Willem and Lindh, Yngve, Dutch Versus Swedish Budgetary Rules: A Comparison (February 1, 2001). Available at SSRN: https://ssrn.com/abstract=2095163 or http://dx.doi.org/10.2139/ssrn.2095163

Willem Heeringa (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Yngve Lindh

Ministry of Finance ( email )

Drottninggatan, 21
Stockholm, SE-103 33
Sweden

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