Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46369 
Authors: 
Year of Publication: 
2011
Series/Report no.: 
CESifo Working Paper No. 3367
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The paper analyses how independent fiscal watchdogs (fiscal policy councils) can strengthen the incentives for fiscal discipline. By increasing fiscal transparency they can raise the awareness of the long-run costs of current deficits and increase the reputational costs for governments of violating their fiscal rules. Councils that make also normative judgements, where fiscal policy is evaluated against the government's own pre-set objectives, are likely to be more influential than councils that do only positive analysis. To fulfil their role adequately, fiscal watchdogs should be granted independence in much the same way as central banks.
Subjects: 
fiscal institutions
deficit bias
fiscal transparency
JEL: 
H60
Document Type: 
Working Paper
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