Should Advanced Countries Adopt a Fiscal Responsibility Law?

Author/Editor:

Ian Lienert

Publication Date:

November 1, 2010

Electronic Access:

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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:

Fiscal Responsibility Laws (FRLs) appear to be more popular in middle-income countries than advanced countries, even though their success is limited. The reasons why few advanced countries have a FRL include: the existing legal framework for the budget system is adequate; supranational rules and political agreements in EU countries; failed attempts to include quantitative fiscal rules in laws; lack of consensus or interest in attaining the goals of FRL-type legislation; and lack of need for a law to regulate fiscal transparency, accountability and macro-fiscal stabilization. Without commitment to fiscal discipline, adoption of a FRL may not contribute to attaining fiscal consolidation goals.

Series:

Working Paper No. 2010/254

Subject:

Budget planning and preparation Fiscal policy Fiscal rules PFM legal and regulatory frameworks Public debt

English

Publication Date:

November 1, 2010

ISBN/ISSN:

9781455209545/1018-5941

Stock No:

WPIEA2010254

Pages:

45

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