Toward a Robust Fiscal Framework for Iceland: Motivation and Practical Suggestions
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
Expenditure in Iceland, especially related to the government wage bill, has tended to move in a procyclical manner, related to the fragmentation of political decision making. Iceland's elevated macroeconomic volatility reinforces these tendencies, as large booms unleash greater fiscal pressures as well as procyclical revenue elasticities that magnify these underlying strains. To improve its fiscal framework, Iceland could look to the experience of countries like Belgium and the Netherlands. In particular, it could adopt binding nominal expenditure rules, independent forecasts, and use representative committees to lay out medium-term targets across different levels of government.
Series:
Working Paper No. 2007/235
Subject:
Budget planning and preparation Current spending Expenditure Fiscal policy Government consumption
English
Publication Date:
October 1, 2007
ISBN/ISSN:
9781451867992/1018-5941
Stock No:
WPIEA2007235
Pages:
25
Please address any questions about this title to publications@imf.org