Should Advanced Countries Adopt a Fiscal Responsibility Law?
November 1, 2010
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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.
Subject: Budget planning and preparation, Fiscal policy, Fiscal rules, PFM legal and regulatory frameworks, Public debt
Keywords: accounting system, annual budget, central government, country experience, EU country, FRL-type law, government accounting, government Financial Reporting Act, government information, government regulation, nonfinancial enterprise, public finance, WP
Pages:
45
Volume:
2010
DOI:
Issue:
254
Series:
Working Paper No. 2010/254
Stock No:
WPIEA2010254
ISBN:
9781455209545
ISSN:
1018-5941
