Independent Fiscal Councils: Recent Trends and Performance

29 Pages Posted: 5 Apr 2018

See all articles by Roel M. W. J. Beetsma

Roel M. W. J. Beetsma

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); European Commission; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute; Netspar

Xavier Debrun

International Monetary Fund (IMF) - Research Department

Xiangming Fang

International Monetary Fund (IMF)

Young Kim

International Monetary Fund (IMF)

Victor Lledo

International Monetary Fund (IMF)

Samba MBaye

International Monetary Fund (IMF)

Xiaoxiao Zhang

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2018

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 possibly less optimistic fiscal forecasts, as well as greater compliance with fiscal rules.

Keywords: fiscal forecasts, fiscal rule compliance, Independent fiscal councils

JEL Classification: E61, E62, H11, H62

Suggested Citation

Beetsma, Roel M. W. J. and Debrun, Xavier and Fang, Xiangming and Kim, Young and Lledo, Victor and MBaye, Samba and Zhang, Xiaoxiao, Independent Fiscal Councils: Recent Trends and Performance (March 2018). CEPR Discussion Paper No. DP12826. Available at SSRN: https://ssrn.com/abstract=3155162

Roel M. W. J. Beetsma (Contact Author)

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Xavier Debrun

International Monetary Fund (IMF) - Research Department ( email )

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202-623-6343 (Fax)

Xiangming Fang

International Monetary Fund (IMF) ( email )

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

Young Kim

International Monetary Fund (IMF) ( email )

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

Victor Lledo

International Monetary Fund (IMF) ( email )

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

Samba MBaye

International Monetary Fund (IMF) ( email )

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

Xiaoxiao Zhang

International Monetary Fund (IMF) ( email )

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

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