Fiscal Rules and the Budget Process

Author/Editor:

Gian M Milesi-Ferretti

Publication Date:

June 1, 1996

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the rationale for the imposition of fiscal rules as a way to reduce budgetary imbalances. It presents theoretical arguments for the existence of a “fiscal deficit bias” and the empirical evidence on the economic, political and institutional factors leading to this bias. In the context of these findings, it discusses the potential role of legal constraints on the level of key fiscal variables, and of reforms in budgetary procedures in enhancing fiscal discipline. It also evaluates proposals for budgetary reform in Italy.

Series:

Working Paper No. 96/60

Subject:

English

Publication Date:

June 1, 1996

ISBN/ISSN:

9781451848007/1018-5941

Stock No:

WPIEA0601996

Format:

Paper

Pages:

39

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