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The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the
Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and
accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.
Governance? Institutions?
• PFM innovations:
Spectrum from specific & doable to abstract/problematic
Enhanced fiscal reporting Transparency, accounting & treasury
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Governance?
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Fiscal Institutions (Councils): Why?
• Lately, we ask whether the rule is “binding” (as law), and also
favor numerical rules
2) Design issues: flexible/practical vs. simple/rigid
⇨ Better rules (e.g., German Debt Brake)
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Fiscal Councils: Why?
• The German Debt Brake tries to make the fiscal rule more practical,
but its motivation also shows the political problem.
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Fiscal Councils: What is their role?
• Fiscal councils can complement fiscal rules to alleviate the political
will problem (difficulty of self-binding decisions)
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Fiscal Councils: What is their role?
• With regard to the “political will” problem, the key role of a fiscal
council is to reduce bias by providing a neutral (or at least a third-
party) assessment
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The spread of fiscal councils
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Limitations?
• Capacity?
Staffing, expertise & access to timely information?
• Neutrality?
Many are PBOs (independent? non-partisan?)
Mandate? (role in budget process may be more “involved”)
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Case study) The UK’s OBR
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Case study) The UK’s OBR
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Case study) The UK’s OBR
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Case study) The UK’s OBR
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Survey of Asian Fiscal Responsibility Laws
(PEMNA 2018)
Q8: What are the elements of your country's fiscal responsibility
arrangements? (Select all that apply)
Answered: 9 Skipped: 2
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Survey of Asian Fiscal Responsibility Laws
(PEMNA 2018)
Q14: What are the main characteristics of the fiscal council? (Select all
that apply)
Answered: 5 Skipped: 6
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Returning to the “self-binding” problem…
“Enforcer”
Type of fiscal rule Examples
= “Enforcee”?
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Fiscal Institutions (Councils) in Asia
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Thank you!
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