Laws for Fiscal Responsibility for Subnational Discipline : International Experience

Liu, Lili ; Webb, Steven B.

关键词: ACCESS TO INFORMATION;    ACCOUNTABILITY;    ACCOUNTING;    ACCOUNTING POLICIES;    ACCOUNTING STANDARDS;   

DOI  :  10.1596/1813-9450-5587
RP-ID  :  WPS5587

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Fiscal responsibility laws areinstitutions with which multiple governments in the sameeconomy -- national and subnational --can commit to helpavoid irresponsible fiscal behavior that could haveshort-term advantages to one of them but that would becollectively damaging. Coordination failures withsubnational governments in the 1990s contributed tomacroeconomic instability and led several countries to adoptfiscal responsibility laws as part of the remedy. The paperanalyzes the characteristics and effects of fiscalresponsibility laws in seven countries -- Argentina,Australia, Brazil, Canada, Colombia, India, and Peru. Fiscalresponsibility laws are designed to address the short timehorizons of policymakers, free riders among governmentunits, and principal agent problems between the national andsubnational governments. The paper describes how the lawsdiffer in the specificity of quantitative targets, thestrength of sanctions, the methods for increasingtransparency, and the level of government passing the law.Evidence shows that fiscal responsibility laws can helpcoordinate and sustain commitments to fiscal prudence, butthey are not a substitute for commitment and should not beviewed as ends in themselves. They can make a positivecontribution by adding to the collection of other measuresto shore up a coalition of states with the centralgovernment in support of fiscal prudence. Policymakerscontemplating fiscal responsibility laws may benefit fromthe systematic review of international practice. One commontrait of successful fiscal responsibility laws forsubnational governments is the commitment of the centralgovernment to its own fiscal prudence, which is usuallyreinforced by the application of the law at the national aswell as the subnational level.