New Goals, More Actors: Rethinking the Political Economy of Fiscal Institutions

This chapter argues that traditional measures of fiscal success, like fiscal discipline and economic growth, should be complemented by new goals reflecting broader human purposes and policy objectives, such as advancing key development priorities, addressing inequalities, and tackling climate change. It also suggests that a broader set of actors, including civil society, fiscal councils, and Supreme Audit Institutions (SAIs) should play more significant roles in holding governments accountable for these long-term policy objectives. Some governments have already initiated reforms to incorporate these broader goals into fiscal policy, including through the adoption of tools like gender budgeting and climate risk assessments, but these efforts are still incipient. The chapter concludes by highlighting the need for rethinking budget processes and institutional designs to address cross-sectoral challenges and incentivize long-term planning, supported by more and better data on the long-term and distributional impacts of public policies.