OECD Journal: Economic Studies

Frequency
Annual
ISSN: 
1995-2856 (online)
ISSN: 
1995-2848 (print)
http://dx.doi.org/10.1787/19952856
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OECD Journal: Economic Studies publishes articles in the area of economic policy analysis, applied economics and statistical analysis, generally with an international or cross-country dimension. It draws significantly on economic papers produced by the OECD Economics Department, other parts of the OECD Secretariat and the Organisation’s intergovernmental committees.

Article
 

How Can Fiscal Councils Strengthen Fiscal Performance? You do not have access to this content

English
 
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    http://oecd.metastore.ingenta.com/content/1311011ec006.pdf
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Author(s):
Robert Hagemann
09 Dec 2011
Pages:
24
Bibliographic information
No.:
3,
Volume:
2011,
Issue:
1
Pages:
1–24
http://dx.doi.org/10.1787/eco_studies-2011-5kg2d3gx4d5c

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There is growing interest in the role of independent fiscal institutions, or fiscal councils, in helping to improve fiscal performance. This article provides some guidance on the scope for improving fiscal performance through fiscal councils based on the available literature and the range of fiscal institutions in the OECD countries. The effectiveness of fiscal councils hinges on several factors, including having full autonomy within the scope of their mandates, active and unfettered dissemination of their analysis, and their credibility. Experience and empirical evidence suggest that delegating macroeconomic forecasting to an independent fiscal council can indeed reduce forecasting bias. There is some empirical evidence that independent fiscal institutions can buttress a government’s capacity to comply with a numerical rule. Good fiscal institutions are a necessary condition for achieving disciplined fiscal performance. Experience demonstrates, however, that their existence is not sufficient. Without strong and sustained political commitment to a medium-term fiscal goal and, where relevant, to the mandate of a fiscal council, durable improvements in fiscal performance will remain elusive.
 
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