## Liechtenstein: The Fiscal Sector Framework

_Selected Issues Papers, April 28, 2025_

## Source details

**Canonical URL:** [Liechtenstein: The Fiscal Sector Framework](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/28/liechtenstein-the-fiscal-sector-framework-566398)

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## Bibliographic details
- Authors: Rodgers B Chawani, Tara Iyer
- Published: April 28, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229009720.018

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### Overview
- 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.

### Key findings
- 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.

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

### Fiscal consolidation 2014-18
- Consolidation was frontloaded.
- Measures included both revenue measures and expenditure measures.
- Aggregate improvement: 4.1 percent of GDP over 2014-18.

### Public sector structure and fiscal outcomes
- 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).

### Productivity and investment
- Productivity has stagnated over the past two decades.
- Productivity levels in Liechtenstein are higher than Switzerland's.
- Recommendation: increased capital investment could help boost productivity.

### Publication metadata (selected)
- Pages: 14
- Series: Selected Issues Paper No. 2025/045
- Issue: 045
- Volume: 2025
- DOI: https://doi.org/10.5089/9798229009720.018
- ISBN: 9798229009720
- ISSN: 2958-7875

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

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- **Sipea2025045**
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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/28/liechtenstein-the-fiscal-sector-framework-566398_