IDEAS home Printed from https://ideas.repec.org/a/eso/journl/v45y2014i1p135-158.html
   My bibliography  Save this article

Ireland’s Fiscal Framework: Options for the Future

Author

Listed:
  • George Kopits

    (Woodrow Wilson International Center for Scholars, Washington DC)

Abstract

The Fiscal Responsibility Act of 2012 established fiscal policy rules and an independent fiscal watchdog, the Irish Fiscal Advisory Council (IFAC) – patterned after the new EU template for fiscal rules and the Swedish fiscal council, respectively. These elements, along with budgetary procedural rules, comprise the core of Ireland’s fiscal framework. Although the present framework meets most criteria of international good practice, there is considerable scope for improvement to meet Ireland’s future needs, especially for restoring public debt sustainability – as it is no longer under the direct tutelage and protection of the EU and IMF. To this end, the paper outlines a set of options to strengthen the fiscal framework consisting, among others, of (a) a binding public debt rule; (b) an indicative structural budget balance rule; (c) a pay-go rule, and (d) steps to broaden the mandate and amplify the resources of IFAC. It is argued that these options should help pave the way to further gains in credibility in financial markets, and ultimately, to higher economic growth and stability.

Suggested Citation

  • George Kopits, 2014. "Ireland’s Fiscal Framework: Options for the Future," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 135-158.
    • Handle: RePEc:eso:journl:v:45:y:2014:i:1:p:135-158
    as

    Download full text from publisher

    File URL: https://www.esr.ie/article/view/111/79
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jeffrey Frankel & Jesse Schreger, 2013. "Over-optimistic official forecasts and fiscal rules in the eurozone," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 247-272, June.
    2. repec:idb:brikps:81359 is not listed on IDEAS
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    4. International Monetary Fund, 2013. "Ireland: Fiscal Transparency Assessment," IMF Staff Country Reports 2013/209, International Monetary Fund.
    5. Szilárd Benk & Zoltán M. Jakab, 2012. "Non-Keynesian Effects of Fiscal Consolidation: An Analysis with an Estimated DSGE Model for the Hungarian Economy," OECD Economics Department Working Papers 945, OECD Publishing.
    6. Tony McDonald & Yong Hong Yan & Blake Ford & David Stephan, 2010. "Estimating the structural budget balance of the Australian Government," Economic Roundup, The Treasury, Australian Government, issue 3, pages 51-79, October.
    7. FitzGerald, John, 2012. "Fiscal Policy for 2013 and Beyond," Papers BP2013/1, Economic and Social Research Institute (ESRI).
    8. Marco Buti & Gabriele Giudice, 2002. "Maastricht’s Fiscal Rules at Ten: An Assessment," Journal of Common Market Studies, Wiley Blackwell, vol. 40(5), pages 823-848, December.
    9. George Kopits, 2012. "Can fiscal sovereignty be reconciled with fiscal discipline?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(2), pages 141-160, June.
    10. Ley, Eduardo & Misch, Florian, 2013. "Real-time macro monitoring and fiscal policy," Policy Research Working Paper Series 6303, The World Bank.
    11. Mr. George Kopits & Mr. Steven A. Symansky, 1998. "Fiscal Policy Rules," IMF Occasional Papers 1998/011, International Monetary Fund.
    12. repec:imf:imfops:1998/001 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kukk Merike & Staehr Karsten, 2015. "Enhanced Fiscal Governance in the European Union: The Fiscal Compact," TalTech Journal of European Studies, Sciendo, vol. 5(1), pages 73-92, February.
    2. Óscar Afonso & Rui Henrique Alves, 2006. "“To Deficit or Not to Deficit”: Should European Fiscal Rules Differ Among Countries?," FEP Working Papers 219, Universidade do Porto, Faculdade de Economia do Porto.
    3. Carranza-Ugarte, Luis & Díaz-Saavedra, Julián & Galdon-Sanchez, Jose Enrique, 2023. "Rethinking fiscal rules," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 833-857.
      • Luis Carranza Ugarte & Julian Diaz Saavedra & Jose Enrique Galdon-Sanchez, 2021. "Rethinking fiscal rules," ThE Papers 21/14, Department of Economic Theory and Economic History of the University of Granada..
    4. repec:spo:wpmain:info:hdl:2441/eu4vqp9ompqllr09j0h0g8tgo is not listed on IDEAS
    5. Combes, Jean-Louis & Minea, Alexandru & Sow, Moussé, 2017. "Is fiscal policy always counter- (pro-) cyclical? The role of public debt and fiscal rules," Economic Modelling, Elsevier, vol. 65(C), pages 138-146.
    6. Jerome Creel & Paul Hubert & Francesco Saraceno, 2012. "An assessment of Stability and Growth Pact Reform Proposals in a Small-Scale Macro Framework," Documents de Travail de l'OFCE 2012-04, Observatoire Francais des Conjonctures Economiques (OFCE).
    7. Ondra Kamenik & Zdenek Tuma & David Vavra & Zuzana Smidova, 2013. "A Simple Fiscal Stress Testing Model: Case Studies of Austrian, Czech and German Economies," OECD Economics Department Working Papers 1074, OECD Publishing.
    8. repec:hal:spmain:info:hdl:2441/eul7jlnf19iq8tdp0vlfv63n5 is not listed on IDEAS
    9. Hideaki Tanaka, 2005. "Fiscal Rules and Targets and Public Expenditure Management: Enthusiasm in the 1990's and its Aftermath," Asia Pacific Economic Papers 346, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    10. Beetsma, Roel & Debrun, Xavier & Fang, Xiangming & Kim, Young & Lledó, Victor & Mbaye, Samba & Zhang, Xiaoxiao, 2019. "Independent fiscal councils: Recent trends and performance," European Journal of Political Economy, Elsevier, vol. 57(C), pages 53-69.
    11. repec:spo:wpmain:info:hdl:2441/2842 is not listed on IDEAS
    12. Paloviita, Maritta & Ikonen, Pasi, 2016. "How to explain errors in budget balance forecasts in euro area countries? Empirical evidence based on real-time data," Research Discussion Papers 17/2016, Bank of Finland.
    13. Buti, M. & Eijffinger, S.C.W. & Franco, D., 2003. "Revisiting the Stability and Growth Pact : Grand Design or Internal Adjustment?," Other publications TiSEM 2e5a01d9-9a1f-492d-995f-a, Tilburg University, School of Economics and Management.
    14. repec:spo:wpecon:info:hdl:2441/2842 is not listed on IDEAS
    15. Mauro Visaggio, 2004. "Does Stability and Growth Pact Provide an Adequate and Consistent Fiscal Rule?," Macroeconomics 0407008, University Library of Munich, Germany.
    16. Seppo Honkapohja & Frank Westermann, 2009. "Fiscal Policy and Macroeconomic Stabilisation in the Euro Area: Possible Reforms of the Stability and Growth Pact and National Decision-Making Processes," Palgrave Macmillan Books, in: Seppo Honkapohja & Frank Westermann (ed.), Designing the European Model, chapter 6, pages 177-228, Palgrave Macmillan.
    17. Sawadogo, Pegdéwendé Nestor, 2020. "Can fiscal rules improve financial market access for developing countries?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    18. Pirvu, Daniela & Dutu, Amalia & Enachescu, Carmen, 2019. "Analysing Of Government'S Fiscal Behaviour In The Eu Member States Through Clustering Procedure," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 10(1), pages 23-39.
    19. repec:hal:wpspec:info:hdl:2441/2842 is not listed on IDEAS
    20. Panagiotis Liargovas & Vasilis Pilichos & Anastasia Angelopoulou, 2021. "Fiscal governance and forecasting Bias: a case study of Greece during the economic crisis," Bulletin of Applied Economics, Risk Market Journals, vol. 8(2), pages 75-95.
    21. Francesco Saraceno & Paola Veroni, 2005. "Reform of the Stability and Growth Pact: Reducing or Increasing the Nuisance," Working Papers hal-03462247, HAL.
    22. Paloviita, Maritta & Ikonen, Pasi, 2016. "How to explain errors in budget balance forecasts in euro area countries? Empirical evidence based on real-time data," Bank of Finland Research Discussion Papers 17/2016, Bank of Finland.
    23. Kugbee S. James & Insah Baba, 2015. "Fiscal Sustainability in the Ghanaian Economy: A Fiscal Reaction Function Approach," Economy, Asian Online Journal Publishing Group, vol. 2(1), pages 16-20.
    24. Francesco Saraceno, 2017. "Rethinking fiscal policy : lessons from the european monetary union," SciencePo Working papers Main hal-03457591, HAL.
    25. Ardanaz, Martín & Ulloa-Suárez, Carolina & Valencia, Oscar, 2024. "Why don't we follow the rules? Drivers of compliance with fiscal policy rules in emerging markets," Journal of International Money and Finance, Elsevier, vol. 142(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:45:y:2014:i:1:p:135-158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aedin Doris (email available below). General contact details of provider: https://www.esr.ie .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.