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The Fiscal Framework In Romania – The Efficiency Of Fiscal Rules

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  • DUMITRESCU, Bogdan Andrei

    (Bucharest University of Economic Studies, Department of Money and Banking and CARFIB)

Abstract

The response of the fiscal policy makers to the fiscal crisis in Romania from 2009-2010 was the initiation of a comprehensive program of fiscal consolidation in mid-2010 alongside with a fundamental modification of the institutional framework within operates the fiscal policy, namely switching to a precisely defined rules-based fiscal framework compared to the previously existing broad discretion. The effectiveness of a fiscal rule is given by the constraint it imposes on the behavior policy makers. This research examines the effectiveness of the fiscal rules introduced by Romania in 2010 through the Fiscal Responsibility Law by assessing the exante and ex-post compliance with the rules and concludes that this was rather reduced, the fiscal rules failing to exert strong constraints on the behavior of policy makers. In this context, it is necessary a reform of the existing fiscal rules, especially in the context of implementing in the national legislation since 2014 of the rules stipulated in the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.

Suggested Citation

  • DUMITRESCU, Bogdan Andrei, 2015. "The Fiscal Framework In Romania – The Efficiency Of Fiscal Rules," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 19(3), pages 91-106.
    • Handle: RePEc:vls:finstu:v:19:y:2015:i:3:p:91-106
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    fiscal policy; fiscal governance; fiscal rules;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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