Credibility and Flexibility.Changes in the Framework of Hungarian Public Finances
AbstractThis paper presents the three most important institutional steps that Hungary took in 2010 and 2011 to promote the responsible management of public funds. It provides a detailed analysis of the strict provisions of the new Constitution regarding public finances, the strengthened mandates of the Fiscal Council and the renewed audit instruments of the State Audit Office of Hungary. The transformation of the institutional system and the regulatory environment was necessary because the significant increase in debt indicated that the earlier, more permissive regulation failed to attain its target. Experience confirmed that without strict rules and reinforced institutions it is not possible to regain the credibility of fiscal policy and to ensure the economical and responsible financial management of the public sector. The paper explains that Hungary’s new fiscal rules represent an unprecedented fiscal commitment even at international level, and that the constitutional powers of the Fiscal Council and the resulting rigour are unique in the world.
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Bibliographic InfoArticle provided by State Audit Office of Hungary in its journal Public Finance Quarterly.
Volume (Year): 56 (2011)
Issue (Month): 3 ()
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Web page: http://www.asz.hu
budget; fiscal policy; public finances; fiscal council; budgetary institutions;
Find related papers by JEL classification:
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
- P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
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- Reinhart, Carmen & Rogoff, Kenneth, 2011.
"A Decade of Debt,"
CEPR Discussion Papers
8310, C.E.P.R. Discussion Papers.
- Kopits, György & Romhányi, Balázs, 2010.
"A Költségvetési Tanács indulásának tanulságai
[Hungarys Fiscal Council: Early lessons]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 573-590.
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