2022 Annual meeting of the OECD network on fiscal relations

• Strengthening the fiscal governance of states & localities in the light of the pandemic

The Covid-19 pandemic has had devastating effects on lives, the economy, and the public finances worldwide, drawing attention to the need to enhance resilience to future shocks. How can we best strengthen the fiscal governance of states & localities, given their key role in the provision of essential public goods & services?

Presentation: Teresa Ter-Minassian and Luiz de Mello (OECD) - Improving subnational governments’ resilience post Covid19

Background document: Improving subnational governments’ resilience in the wake of the COVID-19 pandemic

Presentation: Bill Glasgall (Volcker Alliance) US State Budgets: Yesterday, Today, and Tomorrow

Background document: Finland

• Revisiting and revising subnational fiscal frameworks following the crisis

During the COVID-19 pandemic crisis, subnational fiscal rules were waived in many OECD countries. As we exit the crisis, should intergovernmental fiscal frameworks, subnational fiscal rules and related institutions be re-designed, to better support fiscal sustainability and promote economic stabilisation? There has been extensive disucssion at the European level about the future of fiscal rules and fiscal frameworks, but primarily at a national level. The new paper, based on OECD and EU Surveys, reviews the evidence for subnational rules and combinations over time, and raises important questions about what works.

Presentations: Pietrangelo de Biase (Brazil Treasury) - Subnational fiscal rules before and after the Covid19 crisis, Xavier Debrun (Nat’l Bank of Belgium) - Revisiting and revising subnational fiscal frameworks following the crisis

Background document: The past and future of subnational fiscal rules: an analysis of fiscal rules over time

• Going beyond fiscal equalisation: new approaches to fiscal equalisation after the crisis

Fiscal equalisation approaches vary widely, and not every approach has demonstrated the same flexibility to adapt to the pandemic’s fiscal shock, with as many underfunded following the pandemic. Should fiscal equalisation systems be re-designed in light of intensified regional inequalities and climate change challenges?

Presentation: 

- Geert de Joode (Ministry of Interior and Kingdom Relations, The Netherlands) - Going beyond fiscal equalisation

- Secretariat: Antti Moisio (CFE/RDP) & Andoni Montes (Fiscal Network)

Background document: Going beyond fiscal equalisation: institutional & fiscal tools to fight territorial inequalities

The pandemic led to significant economic disruptions, with governments providing significant monetary and fiscal support to businesses. New risk insurance programmes could potentially address some of the ex ante and ex post challenges related to large-scale fiscal support, but can they overcome design challenges?

Presentation: 

- Secretariat: Leigh Wolfrom (DAF/CFIP) - Could insurance provide an alternative to fiscal support

- Lead discussant: Esther Baur (Swiss Re) - Could insurance provide an alternative to fiscal support lessons from the pandemic

Background document: Could insurance provide an alternative to fiscal support in crisis response?

• Policy instruments and tools to address the subnational challenges of climate change

Addressing the challenges of climate change requires high degree of co-ordination across levels of government, with many policy responsibilities for regions and cities. However, there is a lack of reliable data to assess performance. How can central governments strengthen this information and subnational governments’ incentives?

Presentation:

- Lead speakers: Margaux Lelong (GOV/PMB) on green budgeting approaches; Isabelle Chatry (CFE/RDG) on financing climate actions at the subnational level

- Gianluca Spinaci (European Committee of the Regions)

PROGRAMME OF WORK DISCUSSION

Following the COVID-19 crisis, governments are re-assessing priorities and seeking sustainable fiscal paths and strengthening of intergovernmental fiscal frameworks. How can the Network best support this process? The Network’s mandate is scheduled for renewal this year, along with the next programme of work and budget.

Lead speaker: Sean Dougherty (OECD)