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Ireland’s Fiscal Framework: Options for the Future


  • George Kopits

    (Woodrow Wilson International Center for Scholars, Washington DC)


The Fiscal Responsibility Act of 2012 established fiscal policy rules and an independent fiscal watchdog, the Irish Fiscal Advisory Council (IFAC) – patterned after the new EU template for fiscal rules and the Swedish fiscal council, respectively. These elements, along with budgetary procedural rules, comprise the core of Ireland’s fiscal framework. Although the present framework meets most criteria of international good practice, there is considerable scope for improvement to meet Ireland’s future needs, especially for restoring public debt sustainability – as it is no longer under the direct tutelage and protection of the EU and IMF. To this end, the paper outlines a set of options to strengthen the fiscal framework consisting, among others, of (a) a binding public debt rule; (b) an indicative structural budget balance rule; (c) a pay-go rule, and (d) steps to broaden the mandate and amplify the resources of IFAC. It is argued that these options should help pave the way to further gains in credibility in financial markets, and ultimately, to higher economic growth and stability.

Suggested Citation

  • George Kopits, 2014. "Ireland’s Fiscal Framework: Options for the Future," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 135-158.
  • Handle: RePEc:eso:journl:v:45:y:2014:i:1:p:135-158

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    References listed on IDEAS

    1. Jeffrey Frankel & Jesse Schreger, 2013. "Over-optimistic official forecasts and fiscal rules in the eurozone," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 247-272, June.
    2. Szilárd Benk & Zoltán M. Jakab, 2012. "Non-Keynesian Effects of Fiscal Consolidation: An Analysis with an Estimated DSGE Model for the Hungarian Economy," OECD Economics Department Working Papers 945, OECD Publishing.
    3. Tony McDonald & Yong Hong Yan & Blake Ford & David Stephan, 2010. "Estimating the structural budget balance of the Australian Government," Economic Roundup, The Treasury, Australian Government, issue 3, pages 51-79, October.
    4. FitzGerald, John, 2012. "Fiscal Policy for 2013 and Beyond," Papers BP2013/1, Economic and Social Research Institute (ESRI).
    5. Ales Bulir & Marianne Schulze-Gattas & Atish R. Ghosh & Alex Mourmouras & A. Javier Hamann & Timothy D. Lane, 2002. "IMF-Supported Programs in Capital Account Crises; Design and Experience," IMF Occasional Papers 210, International Monetary Fund.
    6. Marco Buti & Gabriele Giudice, 2002. "Maastricht's Fiscal Rules at Ten: An Assessment," Journal of Common Market Studies, Wiley Blackwell, vol. 40(5), pages 823-848, December.
    7. Emanuele Baldacci & Sanjeev Gupta & Carlos Mulas-Granados, 2012. "Reassessing the fiscal mix for successful debt reduction," Economic Policy, CEPR;CES;MSH, vol. 27(71), pages 365-406, July.
    8. George Kopits, 2012. "Can fiscal sovereignty be reconciled with fiscal discipline?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(2), pages 141-160, June.
    9. Ley, Eduardo & Misch, Florian, 2013. "Real-time macro monitoring and fiscal policy," Policy Research Working Paper Series 6303, The World Bank.
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    fiscal policy; regulation; Ireland;


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