Institutions of Intergovernmental Fiscal Relations

Challenges Ahead

image of Institutions of Intergovernmental Fiscal Relations

Intergovernmental fiscal institutions are the overarching framework for relations across government levels. They comprise the constitutional set up of a country; the division of power between government levels; the prevalence of fiscal rules across government levels; intergovernmental budget frameworks; the role of independent bodies such as fiscal councils in shaping fiscal relations; the inter-ministerial organisation of fiscal decision making; and other framework conditions shaping intergovernmental fiscal relations and fiscal policy. This book brings together academics and practitioners dealing with or being involved in shaping the institutions of intergovernmental fiscal relations. It has an interdisciplinary focus and provides insight from various academic or practitioners’ fields: economists, political scientists, budget management specialists and others.



The budgetary policy framework in Sweden and its implication for intergovernmental fiscal relations

This chapter provides an overview of the Swedish budgetary policy framework with special attention to the local level. The financial crisis that hit the Swedish economy in the early 1990s was a trigger for several political and structural reforms. The reform of the budgetary policy framework, which is part of the fiscal framework, had a great impact on the central and local level. The reforms had large support from society and during the last financial crises starting in 2008 support grew even stronger together with a lot of international recognition. For the local level the balanced budget requirement is the anchor. There are no sanctions involved if budgets are not balanced but most municipalities and county councils have reached the target. During the last years the central government surplus target has been hard to reach and a debate has started to change it to a balance target.


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