Restoring Public Debt Sustainability: The Role of Independent Fiscal Institutions

Restoring Public Debt Sustainability: The Role of Independent Fiscal Institutions represents the first comprehensive survey of a new generation of independent fiscal institutions, established to promote transparency in public finances through real-time monitoring of the soundness of budgetary policymaking. The chapters, authored by heads of the institutions, as well as distinguished policy analysts and academics, explore the rationale and experience of these fiscal watchdogs. Consequently, useful lessons and implications are drawn for the design and practical operation of such institutions. The timeliness of the volume is underscored by the potential role of fiscal watchdogs in containing the public debt crisis that has engulfed a number of countries. Indeed, the recent proliferation of these institutions has been in response to the need for enhancing policy credibility of highly indebted governments in financial markets and, more generally, for strengthening the quality of economic governance. The first part of the book deals with key analytical and institutional issues: the political environment, the scope and limits of these institutions, the delegation of monetary policymaking to an independent body, and the implications of rising public indebtedness. The second part contains case studies of institutions that, for the most part, were born as a result of domestic political developments. The third part presents the experience of institutions whose origins can be traced directly or indirectly to an earlier or a recent financial crisis. The chapters are written from a multidisciplinary - economic, financial, political, legal - perspective, intended for academics, researchers, and practitioners alike. Contributors to this volume - Fabrizio Balassone, Bank of Italy Julia I. Bertelsmann, Heritage Foundation Sir Alan Budd, Oxford University Frits Bos, Central Planning Bureau, Netherlands Lars Calmfors, Stockholm University Robert Chote, Office for Budget Responsibility, United Kingdom Luc Coene, National Bank of Belgium Daniele Franco, Bank of Italy Chiara Goretti, Italian Senate George Kopits, Woodrow Wilson International Center for Scholars and Public Finance Council, Portugal Geert Langenus, National Bank of Belgium Kevin Page, Parliamentary Budget Office, Canada Stephanie Rennane, Urban Institute Alice M. Rivlin, Brookings Institution and Georgetown University Balazs Romhanyi, Fiscal Responsibility Institute Budapest C. Eugene Steuerle, Urban Institute Coen Teulings, Central Planning Bureau, Netherlands Jurgen von Hagen, University of Bonn, CEPR, and Public Finance Council, Portugal Simon Wren-Lewis, Oxford University Tolga R. Yalkin, Parliamentary Budget Office, Canada