Publication detail

Fiscal Policy: Too Political?

Author(s): PhDr. Petr Hedbávný ,
doc. Ing. Ondřej Schneider MPhil., Ph.D.,
Type: IES Working Papers
Year: 2003
Number: 37
Published in: IES WP 2003/37
Publishing place: Prague
Keywords: fiscal policy, fiscal rules, public budgets
JEL codes: E6, H6
Suggested Citation:
Abstract: The paper provides an analysis of the role of fiscal rules. The authors first provide a rationale for the existence of fiscal rules, which is mainly to avoid the governments bias for budget deficits. The paper then surveys existing fiscal rules and analyzes their applicability in the context of the Czech Republic. The authors argue that the institutional arrangement of fiscal policy should mirror the arrangement that has emerged in monetary policy, namely the separation of (certain) fiscal policy decision-making powers from the short-termism of elected officials. In the case of the Czech Republic, the authors argue that the country needs a simple and transparent fiscal rule rather than more sophisticated and seemingly more appropriate rules.
Downloadable: WP 37




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