Second-Generation Fiscal Rules: Balancing Simplicity, Flexibility, and Enforceability
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Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.
Summary:
Fiscal rule frameworks have evolved significantly in response to the global financial crisis. Many countries have reformed their fiscal rules or introduced new ones with a view to enhancing the credibility of fiscal policy and providing a medium-term anchor. Enforcement and monitoring mechanisms have also been upgraded. However, these innovations have made the systems of rules more complicated to operate, while compliance has not improved. The SDN takes stock of past experiences, reviews recent reforms, and presents new research on the effectiveness of rules. It also proposes guiding principles for future reforms to strike a better balance between simplicity, flexibility, and enforceability. Read the blog
Series:
Staff Discussion Notes No. 2018/004
Subject:
Fiscal policy Public financial management (PFM)
Notes:
English
Publication Date:
April 13, 2018
ISBN/ISSN:
9781484350683/2617-6750
Stock No:
SDNEA2018004
Format:
Paper
Pages:
132
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