Independent fiscal councils (probably) improve forecasting and adherence to fiscal rules SHOCK!

Countries increasingly rely on independent fiscal councils to constrain policymakers’ discretion and curb the bias towards excessive deficits and pro-cyclical policies. Since fiscal councils are often recent and heterogeneous across countries, assessing their impact is challenging. Using the latest (2016) vintage of the IMF Fiscal Council Dataset, we focus on two tasks expected to strengthen fiscal performance: the preparation or assessment of forecasts, and the monitoring of compliance with fiscal rules. Tentative econometric evidence suggests that the presence of a fiscal council is associated with more accurate and less optimistic fiscal forecasts, as well as greater compliance with fiscal rules.

The paper can be downloaded from this link.

HT: Saul Eslake for the reference.

This entry was posted in Economics and public policy. Bookmark the permalink.

One Response to Independent fiscal councils (probably) improve forecasting and adherence to fiscal rules SHOCK!

  1. Alan says:

    I am tempted to say ‘Quis custodiet ipsos concilia fiscales’ but it would be an incredibly cheap shot and deeply silly so I won’t.

Leave a Reply

Your email address will not be published. Required fields are marked *

Notify me of followup comments via e-mail. You can also subscribe without commenting.