Credibility and Flexibility.Changes in the Framework of Hungarian Public Finances
This paper presents the three most important institutional steps that Hungary took in 2010 and 2011 to promote the responsible management of public funds. It provides a detailed analysis of the strict provisions of the new Constitution regarding public finances, the strengthened mandates of the Fiscal Council and the renewed audit instruments of the State Audit Office of Hungary. The transformation of the institutional system and the regulatory environment was necessary because the significant increase in debt indicated that the earlier, more permissive regulation failed to attain its target. Experience confirmed that without strict rules and reinforced institutions it is not possible to regain the credibility of fiscal policy and to ensure the economical and responsible financial management of the public sector. The paper explains that Hungary’s new fiscal rules represent an unprecedented fiscal commitment even at international level, and that the constitutional powers of the Fiscal Council and the resulting rigour are unique in the world.
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- Reinhart, Carmen M. & Rogoff, Kenneth, 2011.
"A Decade of Debt,"
CEPR Discussion Papers
8310, C.E.P.R. Discussion Papers.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "A Decade of Debt," Central Banking, Analysis, and Economic Policies Book Series, in: Miguel Fuentes D. & Claudio E. Raddatz & Carmen M. Reinhart (ed.), Capital Mobility and Monetary Policy, edition 1, volume 18, chapter 4, pages 97-135 Central Bank of Chile.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "A Decade of Debt," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6222.
- Kopits, György & Romhányi, Balázs, 2010.
"A Költségvetési Tanács indulásának tanulságai
[Hungarys Fiscal Council: Early lessons]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 573-590.
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