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Democratic Accountability, Deficit Bias, and Independent Fiscal Agencies

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  • Mr. Xavier Debrun

Abstract

Despite growing interest among policymakers, there is no theory of independent fiscal institutions. The emerging literature on "fiscal councils" typically makes informal parallels with the theory of central bank independence, but a very simple formal example shows that such a shortcut is flawed. The paper then illustrates key features of a model of independent fiscal agencies, and in particular the need (1) to incorporate the intrinsically political nature of fiscal policy - which precludes credible delegation of instruments to unelected decisionmakers - and (2) to focus on characterizing "commitment technologies" likely to credibly increase fiscal discipline.

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  • Mr. Xavier Debrun, 2011. "Democratic Accountability, Deficit Bias, and Independent Fiscal Agencies," IMF Working Papers 2011/173, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/173
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    1. repec:ces:ifodic:v:9:y:2011:i:3:p:44-49 is not listed on IDEAS
    2. Xavier Debrun & Keiko Takahashi, 2011. "Independent Fiscal Councils in Continental Europe: Old Wine in New Bottles?," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(3), pages 44-50, October.
    3. Xavier Debrun & Keiko Takahashi, 2011. "Independent Fiscal Councils in Continental Europe: Old Wine in New Bottles?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(03), pages 44-49, October.
    4. Fisayo Fagbemi, 2020. "Assessing the Role of Governance in West African Fiscal Performance," The American Economist, Sage Publications, vol. 65(1), pages 97-122, March.
    5. Ovalle, Raul & Ramírez, Francisco A., 2014. "Reglas versus Discreción en la Política Fiscal: Introducción al caso Dominicano [Rules vs Discretion in Fiscal Policy: An Introduction to the Case of the Dominican Republic]," MPRA Paper 68332, University Library of Munich, Germany.
    6. Xavier Debrun & Tidiane Kinda, 2017. "Strengthening Post‐Crisis Fiscal Credibility: Fiscal Councils on the Rise – A New Dataset," Fiscal Studies, Institute for Fiscal Studies, vol. 38, pages 667-700, December.
    7. Mark Schelker, 2016. "Unabhängige Finanzkontrolle in der Demokratie," CREMA Working Paper Series 2016-06, Center for Research in Economics, Management and the Arts (CREMA).
    8. Calmfors, Lars, 2015. "The Roles of Fiscal Rules, Fiscal Councils and Fiscal Union in EU Integration," Working Paper Series 1076, Research Institute of Industrial Economics.
    9. Stasavage, David, 2016. "What we can learn from the early history of sovereign debt," Explorations in Economic History, Elsevier, vol. 59(C), pages 1-16.
    10. Patrícia Martins & Leonida Correia, 2021. "Fiscal institutions: different classifications and their effectiveness," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(1), pages 159-190, March.
    11. Csaba G. Tóth & Dávid Berta, 2017. "Fiscal Rules," MNB Handbook, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 2(14), pages 1-60.
    12. Carlos Caceres & Serhan Cevik & Ricardo Fenochietto & Borja Gracia, 2015. "The Day After Tomorrow: Designing an Optimal Fiscal Strategy for Libya," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(4), pages 32-50, June.
    13. Frantisek Hajnovic & Juraj Zeman, 2012. "Fiscal Space in the Euro zone," Working and Discussion Papers WP 5/2012, Research Department, National Bank of Slovakia.
    14. repec:ces:ifodic:v:9:y:2011:i:3:p:16752097 is not listed on IDEAS

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