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Improving the Fiscal Framework to Enhance Growth in an Era of Fiscal Consolidation in Slovakia

Author

Listed:
  • Caroline Klein

    (OECD)

  • Robert Price
  • Andreas Wörgötter

    (OECD)

Abstract

The challenge for fiscal policy in Slovakia is to achieve fiscal consolidation in a way which supports the fragile recovery and protects spending on areas which are important for re-embarking on a trajectory of high trend growth and underpinning a catch-up in living standards. While the recently established fiscal rules have significantly improved the fiscal framework, a further strengthening in medium-term fiscal discipline will be necessary to avoid pro-cyclical fiscal policy. Raising the effectiveness of tax collection, reforming the tax structure towards less distortive taxes and making more out of available EU funds would also play a helpful role in a growth-friendly fiscal consolidation. Finally, more needs to be done to ensure an adequate prioritisation of spending and an efficient use of public revenues. In particular, stepping up the analytical monitoring, evaluation and assessment capacity in spending ministries should help to rein in wasteful spending. This Working Paper relates to the 2012 OECD Economic Survey of the Slovak Republic (www.oecd.org/eco/surveys/slovakia2012). Améliorer le cadre budgétaire pour favoriser la croissance en période d'assainissement budgétaire en Slovaquie Le défi pour la politique budgétaire en Slovaquie est d'assainir les finances publiques d'une manière qui soutienne la reprise fragile et protège les dépenses dans des domaines permettant de reprendre une trajectoire de forte croissance tendancielle et de poursuivre le rattrapage en termes de niveau de vie. Bien que les règles fiscales récemment établies aient considérablement amélioré le cadre budgétaire, un renforcement de la discipline budgétaire de moyen terme sera nécessaire pour éviter une politique budgétaire pro-cyclique. Accroître l'efficacité du recouvrement des impôts, reformer la fiscalité en faveur d’impôts moins distorsifs et mieux utiliser les fonds de l'UE disponibles pourrait également aider à une consolidation budgétaire favorable à la croissance. Enfin, il reste encore beaucoup à faire pour assurer une hiérarchisation adéquate des dépenses et une utilisation efficace des revenus publics. En particulier, le développement des capacités analytiques de suivi et d'évaluation dans les ministères devraient contribuer à freiner les dépenses inutiles. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de la République slovaque 2012 (www.oecd.org/eco/etudes/slovaquie2012 ).

Suggested Citation

  • Caroline Klein & Robert Price & Andreas Wörgötter, 2013. "Improving the Fiscal Framework to Enhance Growth in an Era of Fiscal Consolidation in Slovakia," OECD Economics Department Working Papers 1018, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1018-en
    DOI: 10.1787/5k4c9kv6b7f2-en
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    References listed on IDEAS

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    1. Douglas Sutherland & Robert Price & Isabelle Joumard & Chantal Nicq, 2007. "Performance Indicators for Public Spending Efficiency in Primary and Secondary Education," OECD Economics Department Working Papers 546, OECD Publishing.
    2. Isabelle Joumard & Christophe André & Chantal Nicq, 2010. "Health Care Systems: Efficiency and Institutions," OECD Economics Department Working Papers 769, OECD Publishing.
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    4. George Kopits, 2011. "Independent Fiscal Institutions: Developing Good Practices," OECD Journal on Budgeting, OECD Publishing, vol. 11(3), pages 1-18.
    5. Leibfritz, Willi, 2011. "Undeclared economic activity in central and eastern Europe -- how taxes contribute and how countries respond to the problem," Policy Research Working Paper Series 5923, The World Bank.
    6. Douglas Sutherland & Sonia Araujo & Balázs Égert & Tomasz Koźluk, 2009. "Infrastructure Investment: Links to Growth and the Role of Public Policies," OECD Economics Department Working Papers 686, OECD Publishing.
    7. Frédéric Gonand & Isabelle Joumard & Robert Price, 2007. "Public Spending Efficiency: Institutional Indicators in Primary and Secondary Education," OECD Economics Department Working Papers 543, OECD Publishing.
    8. Sónia Araújo & Douglas Sutherland, 2010. "Public-Private Partnerships and Investment in Infrastructure," OECD Economics Department Working Papers 803, OECD Publishing.
    9. Zsolt Darvas, 2010. "The Impact of the Crisis on Budget Policy in Central and Eastern Europe," OECD Journal on Budgeting, OECD Publishing, vol. 10(1), pages 1-42.
    10. Robert P. Hagemann, 2012. "Fiscal Consolidation: Part 6. What Are the Best Policy Instruments for Fiscal Consolidation?," OECD Economics Department Working Papers 937, OECD Publishing.
    11. repec:dau:papers:123456789/11017 is not listed on IDEAS
    12. Michal Horvath & Ludivit Odor, 2009. "Making Fiscal Commitments Credible," Working and Discussion Papers DP 2/2009, Research Department, National Bank of Slovakia.
    13. Douglas Sutherland & Peter Hoeller & Rossana Merola, 2012. "Fiscal Consolidation: How Much, How Fast and by What Means?," OECD Economic Policy Papers 1, OECD Publishing.
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    Cited by:

    1. Burret, Heiko T. & Schnellenbach, Jan, 2014. "Implementation of the fiscal compact in the Euro area member states: Expertise on the behalf of the German Council of Economic Experts," Working Papers 08/2013e, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    2. Burret, Heiko T. & Schnellenbach, Jan, 2013. "Umsetzung des Fiskalpakts im Euro-Raum: Expertise im Auftrag des Sachverständigenrates zur Begutachtung der gesamtwirtschaftlichen Entwicklung," Working Papers 08/2013, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    3. Stanova, Nadja, 2015. "Fiscal discretion, growth and output volatility in new EU member countries," MPRA Paper 63946, University Library of Munich, Germany.
    4. Falilou Fall & Debra Bloch & Jean-Marc Fournier & Peter Hoeller, 2015. "Prudent debt targets and fiscal frameworks," OECD Economic Policy Papers 15, OECD Publishing.

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    More about this item

    Keywords

    administration fiscale; budgetary framework; cadre budgétaire; fiscal policy; politique budgétaire; public debt sustainability; Slovakia; Slovaquie; tax administration; viabilité de la dette publique;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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