How to Design Subnational Fiscal Rules: A Primer

IMF How To Notes, February 25, 2020

Source details

Canonical URL

How to Design Subnational Fiscal Rules: A Primer

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Andrew Hodge, John Ralyea, Julien Reynaud
• Published: February 25, 2020
• Series: IMF How To Notes
• DOI: https://doi.org/10.5089/9781513527031.061

Summary and scope

• Discusses how to design subnational fiscal rules, including how to select them and calibrate them.
• Expands on guidance provided at the national level in IMF (2018a) and IMF (2018b).
• Notes that thinking on subnational fiscal rules is still evolving, including their effectiveness (for example, Heinemann, Moessinger, and Yeter 2018; Kotia and Lledó 2016; Foremny 2014).
• Provides a first analysis based on international experiences and the technical assistance provided by the IMF.
• Main findings are summarized in Box 1.

Structure of the note

• Divided into five sections:
  • Section 1: Defines fiscal rules.
  • Section 2: Discusses the rationale for subnational rules.
  • Section 3: Provides guidance on how to select the appropriate rule(s) and whether they should differ across individual jurisdictions.
  • Section 4: Explores flexibility and how rules should adjust to shocks.
  • Section 5: Focuses on the “calibration” of the rules.

Authors and publication

• By Andrew Hodge, John Ralyea, Julien Reynaud
• February 25, 2020
• Format cited in Chicago: Andrew Hodge, John Ralyea, and Julien Reynaud. "How to Design Subnational Fiscal Rules: A Primer", IMF How To Notes 2020, 001 (2020), accessed 6/24/2026, https://doi.org/10.5089/9781513527031.061

Subject coverage and keywords

• Subject: Budget planning and preparation, Current spending, Debt service, Expenditure, External debt, Fiscal policy, Fiscal rules, Public financial management (PFM)
• Keywords (as provided): Allowed, budget balance rule, Budget planning and preparation, CAB rule, central government, country, Current spending, debt rule, Debt service, debt service rule, design Subnational fiscal rule, expenditure rule, FADHTN, Fiscal rules, fiscal RulesHow, Global, government, government control, government entity, government level, government policy, government rule, government unit, governments in OECD country, HTN, national government, output gap, RulesHow to design Subnational fiscal rule, Subnational fiscal RulesHow

Content in this bundle

• How to Design Subnational Fiscal Rules: A Primer; How to Notes 20/01; February 2020
  • How to Design Subnational Fiscal Rules: A Primer; How to Notes 20/01; February 2020 (Markdown version)
  • How to Design Subnational Fiscal Rules: A Primer; How to Notes 20/01; February 2020 (PDF)