Making Fiscal Commitments Credible
AbstractThe study critically analyzes the weak points of current fiscal institutions in Slovakia, while proposing a new institutional framework. It is based on the concept of the net worth and reflects international experience. The main part of the proposal is additional fiscal rules to the Stability and Growth Pact – a gross debt limit and expenditure ceilings, new rules for the financial management of municipalities, and requirements for greater transparency. It is our proposal to set up a Fiscal Council under the National Council of the Slovak Republic, which would check and monitor fiscal processes and rules. The new framework should increase the credibility of Slovakia when looking for exit strategies following unfavourable impacts of the current economic crisis; it should also lead to lower interest rates and more dynamic and stable growth from the long-term perspective.
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Bibliographic InfoPaper provided by Research Department, National Bank of Slovakia in its series Working and Discussion Papers with number DP 2/2009.
Length: 43 pages
Date of creation: Dec 2009
Date of revision:
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Web page: http://www.nbs.sk/en/publications-issued-by-the-nbs/working-papers
More information through EDIRC
Fiscal rules; Fiscal Council; Time inconsistence; Net worth;
Find related papers by JEL classification:
- E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-28 (All new papers)
- NEP-CBA-2010-08-28 (Central Banking)
- NEP-EEC-2010-08-28 (European Economics)
- NEP-IFN-2010-08-28 (International Finance)
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