Working paper 04-06 - Fiscal councils, independent forecasts and the budgetary process: lessons from the Belgian case
AbstractThis paper describes the operating mode of the two existing Belgian fiscal councils as well as their role in the budgetary planning process. These institutions, created or reformed in depth in a context of large public deficits and increasing public debt-to-GDP ratios coupled with the regionalization of the Belgian state, are the result of a maturing process. The National Accounts Institute covers the positive side of the budgetary process, while the High Council of Finance deals with the normative side. Concerning the former domain, the creation of an independent institution to provide unbiased forecasts undeniably contributed to the consolidation of public finances in Belgium. In the context of the revised Stability and Growth Pact, lessons drawn from the Belgian experience can certainly be useful for other Member States willing to improve their fiscal institutional settings. Our chief recommendations for making the budgetary process successful are: institutions dealing with positive economics should enjoy a fully independent status but remain public; positive and normative issues should be completely separated from an institutional point of view; and responsibility should be shared between several strong independent institutions so as to minimize political pressure.
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Bibliographic InfoPaper provided by Federal Planning Bureau, Belgium in its series Working Papers with number 0604.
Date of creation: 15 Jun 2006
Date of revision:
Fiscal institution; Budgetary Process; Forecast accuracy;
Find related papers by JEL classification:
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
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