Liechtenstein: The Fiscal Sector Framework

Selected Issues Papers, April 28, 2025

Source details

Paper analyzes Liechtenstein's fiscal framework and benchmarks key fiscal indicators against European peers.
Highlights successful consolidation following the global financial crisis.
Authors: Rodgers B Chawani, Tara Iyer.
Date: April 28, 2025.

Liechtenstein improved the fiscal balance by 4.1 percent of GDP during 2014-18.
Fiscal consolidation was frontloaded and implemented through both revenue and expenditure measures.
Despite low tax rates, Liechtenstein operates a lean government structure with low public employment levels and low wage bills.
Productivity in Liechtenstein has stagnated over the past two decades, although it remains higher than Switzerland's.
Increased capital investment could boost productivity.

The budget balance rule anchors fiscal policy.
The study benchmarks Liechtenstein’s fiscal indicators against European peers to assess performance and fiscal stance.

Low tax rates coexist with a lean government structure.
Indicators of leanness include low public employment levels and low wage bills (terms presented qualitatively in the paper).

Liechtenstein: The Fiscal Sector Framework by Rodgers B Chawani and Tara Iyer, April 28, 2025.