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Expenditure Ceilings: A Survey

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  • Gösta Ljungman
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    Abstract

    This paper looks at the factors that have to be considered when designing an aggregate expenditure ceiling. It is argued that expenditure ceilings are effective in promoting fiscal discipline and sustainability, but that a number of trade-offs have to be made when setting up a fiscal framework that will survive in a politically charged environment. The paper illustrates the discussion with a case study of medium-term aggregate expenditure ceilings in three countries: Finland, the Netherlands and Sweden.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/282.

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    Length: 55
    Date of creation: 01 Dec 2008
    Date of revision:
    Handle: RePEc:imf:imfwpa:08/282

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    Related research

    Keywords: Government expenditures; Budgetary policy; Fiscal sustainability; expenditure; expenditure ceiling; government expenditure; fiscal policy; expenditure ceilings; fiscal framework; public expenditure; public finances; fiscal rules; aggregate expenditure; investment expenditure; fiscal discipline; central government expenditure; expenditure items; expenditure increases; expenditure level; tax revenue; budget process; budget negotiations; expenditure categories; total expenditure; medium-term expenditure; fiscal policies; interest expenditure; fiscal balance; debt service; tax wedge; government revenue; budget balance; primary expenditure; expenditure growth; budget law; public spending; expenditure increase; government spending; expenditure cuts; tax expenditure; expenditures; fiscal affairs; fiscal forecasts; fiscal affairs department; public debt; fiscal difficulties; annual budget; tax system; aggregate demand; central government spending; expenditure policies; national budget; expenditure forecasts; fiscal crisis; annual expenditure ceilings; expenditure levels; fiscal conditions; expenditure policy; budget expenditure; aggregate expenditure ceilings; aggregate expenditure ceiling; tax expenditures; national expenditure; structural expenditure; fiscal policy rules; tax reductions; tax bases; structural budget balance; budget preparation process; budgetary rules; nominal expenditure ceiling; tax rates; fiscal rule; fiscal development; fiscal objectives; general government expenditure; fiscal performance; fiscal outcome; structural fiscal; medium-term projections; budget deficits; aggregate fiscal; local government expenditure; tax reforms; medium-term fiscal framework; fiscal policy formulation; fiscal scenarios; fiscal policy envelope; fiscal rectitude; tax changes; sectoral expenditure; fiscal illusion; fiscal stabilizers; sector expenditure; tax policy; fiscal frameworks; structural adjustment; revenue collection; expenditure areas; fiscal policy targets; tax increases; tax cuts; allocation of expenditure; budgetary institutions; expenditure projections; tax ratio; fiscal indicators; state budget; fiscal position; expenditure ratio; budget balances; fiscal stabilization; fiscal transparency; expenditure obligations; administrative expenditure; government budget; classification of expenditure; fiscal analysis; budget systems; medium-term fiscal sustainability; fiscal forecasting; taxation; public finance; fiscal stability; expenditure forecast; fiscal years; expenditure patterns; tax credits; fiscal authorities; composition of government expenditure; tax increase; fiscal impact; central government budget; fiscal risks; government deficit;

    This paper has been announced in the following NEP Reports:

    References

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    1. Jón R. Blöndal, 2004. "Issues in Accrual Budgeting," OECD Journal on Budgeting, OECD Publishing, OECD Publishing, vol. 4(1), pages 103-119.
    2. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
    3. Perotti, Roberto, 2005. "Estimating the Effects of Fiscal Policy in OECD Countries," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4842, C.E.P.R. Discussion Papers.
    4. Barro, Robert J, 1979. "On the Determination of the Public Debt," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages 940-71, October.
    5. Roberto Perotti, 2005. "Estimating the effects of fiscal policy in OECD countries," Proceedings, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco.
    6. Philip Hemmings & David Turner & Seija Parviainen, 2003. "Enhancing the Effectiveness of Public Spending in Finland," OECD Economics Department Working Papers 358, OECD Publishing.
    7. George Kopits & Steven A. Symansky, 1998. "Fiscal Policy Rules," IMF Occasional Papers 162, International Monetary Fund.
    8. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, Elsevier, vol. 33(5), pages 903-933, May.
    9. Hallerberg, Mark & von Hagen, Jürgen, 1997. "Electoral Institutions, Cabinet Negotiations, and Budget Deficits within the European Union," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1555, C.E.P.R. Discussion Papers.
    10. Stephen Murchison & Janine Robbins, . "Fiscal Policy and the Business Cycle: A New Approach to Identifying the Interaction," Working Papers-Department of Finance Canada, Department of Finance Canada 2003-06, Department of Finance Canada.
    11. George Kopits, 2001. "Fiscal Rules," IMF Working Papers 01/145, International Monetary Fund.
    12. Torben Andersen, 2005. "Is there a Role for an Active Fiscal Stabilization Policy?," CESifo Working Paper Series 1447, CESifo Group Munich.
    13. Allen Schick, 2003. "The Role of Fiscal Rules in Budgeting," OECD Journal on Budgeting, OECD Publishing, OECD Publishing, vol. 3(3), pages 7-34.
    14. Vincent Koen & Paul van den Noord, 2005. "Fiscal Gimmickry in Europe: One-Off Measures and Creative Accounting," OECD Economics Department Working Papers 417, OECD Publishing.
    15. Nathalie Girouard & Christophe André, 2005. "Measuring Cyclically-adjusted Budget Balances for OECD Countries," OECD Economics Department Working Papers 434, OECD Publishing.
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    Cited by:
    1. Flodén, Martin, 2012. "A Role Model for the Conduct of Fiscal Policy? Experiences from Sweden," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9095, C.E.P.R. Discussion Papers.
    2. Sacchi, Agnese & Salotti, Simone, 2014. "The impact of national fiscal rules on the stabilisation function of fiscal policy," MPRA Paper 56982, University Library of Munich, Germany.

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