Fiscal Rules in Response to the Crisis-Toward the 'Next-Generation' Rules: A New Dataset

50 Pages Posted: 1 Nov 2012

See all articles by Andrea Schaechter

Andrea Schaechter

International Monetary Fund (IMF)

Tidiane Kinda

International Monetary Fund (IMF)

Nina T. Budina

International Monetary Fund

Anke Weber

International Monetary Fund (IMF)

Date Written: July 2012

Abstract

Strengthening fiscal frameworks, in particular fiscal rules, has emerged as a key response to the fiscal legacy of the crisis. This paper takes stock of fiscal rules in use around the world, compiles a dataset - covering national and supranational fiscal rules, in 81 countries from 1985 to end-March 2012 - and presents details about the rules’ key design elements, particularly in support of enforcement. This information is summarized in a set of fiscal rules indices. Three key findings emerge: (i) many new fiscal rules have been adopted and existing ones strengthened in response to the crisis; (ii) the number of fiscal rules and the comprehensiveness of the design features in emerging economies has caught up to those in advanced economies; and (iii) the "next-generation" fiscal rules are increasingly complex as they combine the objectives of sustainability and with the need for flexibility in response to shocks, thereby creating new challenges for implementation, communication, and monitoring.

Keywords: Fiscal Rules, Fiscal Governance, Fiscal Policy, External Shocks

JEL Classification: E62, H11, H62

Suggested Citation

Schaechter, Andrea and Kinda, Tidiane and Budina, Nina T. and Weber, Anke, Fiscal Rules in Response to the Crisis-Toward the 'Next-Generation' Rules: A New Dataset (July 2012). IMF Working Paper No. 12/187. Available at SSRN: https://ssrn.com/abstract=2169733

Andrea Schaechter (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Tidiane Kinda

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Nina T. Budina

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

HOME PAGE: http://www.imf.org

Anke Weber

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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