scholarly journals ARE FISCAL RULES AN EFFECTIVE INSTRUMENT IN CONSOLIDATING PUBLIC FINANCES? CONCLUSIONS FROM THE ECONOMIC CRISIS

2016 ◽  
Vol 15 (1) ◽  
pp. 59
Author(s):  
Joanna Działo
Keyword(s):  
Economic Crisis ◽  
Fiscal Rules ◽  
Public Finances ◽  
Effective Instrument

Economic Crisis: Brazil and IMF Reach Accord on Economic Reform Program Backed By $41 Billion in Loans

1999 ◽  
Vol 10 (1) ◽  
pp. 143-149
Keyword(s):  
Economic Crisis ◽  
Economic Reform ◽  
Public Finances ◽  
Fiscal Adjustment ◽  
Reform Program ◽  
Adjustment Program

We welcome Brazil's announcement of a strong fiscal adjustment program to strengthen Brazil's public finances. It is essential that Brazil implement their program promptly and convincingly.

scholarly journals National fiscal frameworks in the post-crisis European Union

Equilibrium ◽  
2018 ◽  
Vol 13 (4) ◽  
pp. 623-642
Author(s):  
Agata Szymańska
Keyword(s):  
Public Finance ◽  
European Union ◽  
Value Added ◽  
Fiscal Rules ◽  
Agglomerative Clustering ◽  
Clustering Method ◽  
Public Finances ◽  
Eu Countries ◽  
The Eu ◽  
Fiscal Frameworks

Research background: The latest economic and financial crisis has seriously injured European Union Member States, affecting the condition of their public finances. In the face of the crisis, the EU made a special effort to increase the effectiveness of national fiscal frameworks, e.g. by improving the compliance with legislation. The post 2009 reforms were aimed at providing a solid economic foundation for the national fiscal frameworks, especially in the high-debt euro area countries. Purpose of the article: The goal of this research is twofold. Firstly, it aims to provide an outline of the national fiscal governance in the EU. Secondly, the paper analyzes the changes in the core measures of fiscal governance in the EU between the crisis period and the year 2016 (due to the latest available data) and investigates the similarities in the progress made by the 28 EU countries in restoring balance in public finance. Methods: To achieve the goal, the literature review and the analysis of core elements of national fiscal frameworks are provided. In the empirical section the grouping method for all 28 EU countries based on the Ward's agglomerative hierarchical clustering method is employed. The study uses data derived from the AMECO database (in the case of fiscal data) and the European Commission thematic data for quality indexes of particular elements of fiscal governance (numerical fiscal rules, medium-term budgetary frameworks and independent fiscal institutions). Findings & Value added: This paper contributes to the literature by, on the one hand, attempting to analyze changes in main fiscal governance measures and, on the other hand, by assessing their link with public finance through employment of the agglomerative clustering method. Based on the results, the conclusion about the importance of the improvement in fiscal frameworks is provided. The analysis shows that countries with better national fiscal framework achieved better results in public finances regardless the macroeconomic conditions.

scholarly journals Public Investment and Fiscal Crisis in Brazil: Finding Culprits and Solutions

2021 ◽  
Author(s):  
Marco Bonomo ◽  
Claudio R. Frischtak ◽  
Paulo Ribeiro
Keyword(s):  
Narrative Analysis ◽  
Public Investment ◽  
National Level ◽  
Fiscal Crisis ◽  
Fiscal Rules ◽  
Steady Increase ◽  
Empirical Estimation ◽  
Fiscal Management ◽  
Fiscal Conditions ◽  
Effective Instrument

We investigate the relation between existing fiscal rules and investments in the context of a fiscal crisis in Brazil. We analyze existing fiscal rules at national and subnational levels, their enforcement, and proposed alternatives. Using narrative analysis, case studies, interviews, empirical estimation, and model simulations, we conclude that public investment is not closely related to fiscal rules in Brazil but is mainly determined by fiscal conditions both at national and subnational (state) levels. It is the steady increase of personnel expenditures in real terms that underlies the fiscal deterioration of the last decade, despite the existence of fiscal rules devised to prevent it. We argue that a constitutional rule limiting subnationals personnel expenditures to 50 percent of net revenues, triggering adjustment measures when reaching 47.5 percent, would be an effective instrument for subnational fiscal management, opening fiscal space for increasing investments. At the national level, despite the existence of several fiscal rules, the only effective fiscal anchor is the primary expenditure ceiling introduced in 2016, which has successfully curbed expenditures, including those of the judiciary and legislature.

scholarly journals The Implication of Fiscal Principles and Rules on Promoting Sustainable Public Finances in the EU Countries

2020 ◽  
Vol 12 (7) ◽  
pp. 2772 ◽  
Author(s):  
Mihaela Onofrei ◽  
Anca Gavriluţă (Vatamanu) ◽  
Ionel Bostan ◽  
Florin Oprea ◽  
Gigel Paraschiv ◽  
...  
Keyword(s):  
Panel Data Analysis ◽  
Legal Framework ◽  
Fiscal Rules ◽  
The European Union ◽  
Fiscal Responsibility ◽  
Public Finances ◽  
Eu Member States ◽  
The Status ◽  
Outstanding Debt ◽  
The Eu

The purpose of this study was to analyze fiscal behavior in the European Union countries, to highlight the implications of institutional constraints on healthy fiscal attitudes, and to test the relationship between government decisions, fiscal responsibility instruments, and the sustainability of public finances during the period 2000–2014. By using panel data analysis, we tested the responsiveness of primary balance to government indebtedness, as well as to some determinants of fiscal responsibility, such as the degree of public spending or fiscal rules effectiveness, and we included two different perspectives regarding fiscal rules status. First, we computed a fiscal responsibility index, which measures the applicability of or compliance with the fiscal rules, referring to legal dimensions and administrative and institutional capacity. Second, we established a fiscal responsibility convergence index, which measures the status of the EU Member States regarding the approach of numerical rules. The empirical findings indicate that fiscal authorities do not act to the existing stock of public debt and highlights a negative response of budget balances to the stock of outstanding debt. Fiscal position improves when the index of fiscal responsibility is involved and countries become more sustainable when they are related to the entire level of fiscal governance, with respect to legal framework, institutional and administrative capacity, but at the debt ratio threshold of over 90%, the effect of the overall fiscal rule comes out as less relevant for the improvement of the primary balance.

Taking Stock of the EU Fiscal Rules over the Past 20 Years and Options for Reform

2019 ◽  
Vol 239 (5-6) ◽  
pp. 861-894
Author(s):  
Christophe Kamps ◽  
Nadine Leiner-Killinger
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Maastricht Treaty ◽  
Fiscal Rules ◽  
Stability And Growth Pact ◽  
Public Finances ◽  
The Past ◽  
Growth Pact ◽  
The Stability ◽  
The Eu

Abstract This paper reviews how the European Union’s fiscal rules have developed from the Maastricht Treaty that established the single monetary policy up until today. It shows that the design of these rules did not always follow economic logic but often resulted from political constraints, giving rise to some flaws in the framework from its very beginning. At the same time, the repeated attempts to adjust the fiscal framework to a multitude of circumstances over the past 25 years have made it overly complex and incoherent. Based on a finding that euro area countries’ compliance with the EU fiscal rules has been unsatisfactory, the paper concludes that in its current shape the Stability and Growth Pact is an insufficient disciplining device in good economic times, with the consequence that there are no fiscal buffers, in particular in high-debt countries, such that growth can be supported in economic troughs. Based on this finding, the paper reviews reform options for making the fiscal framework more effective in bringing about sounder public finances and avoiding the pro-cyclicality observed over the past two decades.

scholarly journals Impact of fiscal institutions on public finances in the European Union: Review of evidence in the empirical literature

2021 ◽  
Vol 21 (2) ◽  
pp. 215-232
Author(s):  
Martin Gorčák ◽  
Stanislav Šaroch
Keyword(s):  
European Union ◽  
Fiscal Policy ◽  
Policy Making ◽  
Fiscal Rules ◽  
Empirical Literature ◽  
The European Union ◽  
Fiscal Institutions ◽  
Public Finances ◽  
The Eu ◽  
Fiscal Outcomes

Abstract This paper examines the impact of budgetary institutions on public finances in the European Union on the basis of a critical survey of the relevant theoretical and empirical literature. In general, the authors find that fiscal institutions (namely fiscal rules) have successfully contributed to greater fiscal sustainability, reduced procyclicality of fiscal policies within the EU, and increased national ownership of fiscal rules by strengthening national fiscal frameworks. A fiscal reaction function was one of the widely used methods to determine the principal variables affecting fiscal outcomes. Some authors used cyclically-adjusted fiscal outcomes as the dependent variable representing the discretionary fiscal policy-making whereas others put emphasis on other fiscal outcomes. The samples of countries covered mostly the EU Member States, representing rather homogenous samples in the context of common EU fiscal framework. Institutional aspects used as independent variables differed significantly among authors and some could be added for future research. Based on the literature survey, several recommendations were made for fiscal policy-making.

scholarly journals Public finance reforms and corporate sector impact: A study of Hungary

2021 ◽  
Vol 18 (3) ◽  
pp. 191-200
Author(s):  
Csaba Lentner ◽  
Vitéz Nagy
Keyword(s):  
Public Finance ◽  
European Union ◽  
Economic Crisis ◽  
Debt Crisis ◽  
Fiscal Rules ◽  
Full Detail ◽  
The European Union ◽  
Consolidation Process ◽  
Member States ◽  
The Government

The global financial and economic crisis of 2007 and 2008 entailed a sharp deterioration of fiscal positions worldwide; however, fiscal rules soon tightened up in different countries, and parallelly, budgetary discipline improved. A reconsideration of the fiscal policy was necessary as a sovereign debt crisis evolved as a result of the world economic crisis in several countries of the European Union and the eurozone. The study starts at the government debt map of the old member states of the European Union, to which the Hungarian financial positions outside the eurozone are compared. Then, the components of the new Hungarian public finance regulation, major measures, which resulted in an improvement in line with eurozone positions, are presented in full detail. Our study seeks to prove that because of the Hungarian public finance reforms, the fiscal course has also improved, fitting the trends of developed member states of the EU. Although earlier researches have highlighted that it was not only modified fiscal policies that contributed to the post-crisis debt consolidation process in the countries of the eurozone but also the combined effect of the real interest rate and real growth policy. The uniqueness of the study lies in the regulatory instruments, with which the country – positioned in a socialist planned economy, then demonstrating a weak fiscal discipline and sunk in a fiscal crisis even before the global economic crisis of 2007 and 2008 – has consolidated its positions.

scholarly journals Fiscal Rules and Effective Fiscal Policy

2012 ◽  
Vol 15 (2) ◽  
pp. 65-78 ◽  
Author(s):  
Joanna Działo
Keyword(s):  
Fiscal Policy ◽  
Public Debt ◽  
Government Spending ◽  
Budget Deficit ◽  
Fiscal Rules ◽  
Political Factors ◽  
Public Finances ◽  
The Eu ◽  
Macroeconomic Stability

This article examines and assesses the influence of political factors on the effectiveness of pursuing fiscal policy. These factors usually cause and maintain a high budget deficit and public debt. Moreover, the problems of influence of fiscal rules on increased effectiveness of the pursued fiscal policy have been discussed. The fiscal rules are to assure macroeconomic stability in economy and improve credibility of the pursued fiscal policy by reducing the deficit, government spending, and public debt. Examples of applicable fiscal rules in the EU and Poland are presented and an attempt is made to evaluate the effectiveness of these rules in the process of consolidation of public finances.

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