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The Dutch fiscal framework; history, current practice and the role of the CPB

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  • Frits Bos

    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

According to the IMF and the OECD, the Dutch fiscal framework is rather unique, and its design and implementation are highly recommendable. Major features of the Dutch fiscal framework are the trend-based fiscal framework with real net expenditure ceilings for the whole term of government, the role of independent organisations, like the CPB, Statistics Netherlands and the Netherlands Court of Audit, and the intermediary role of the national advisory group on budgetary principles. This paper discusses the current practice of the Dutch fiscal framework, including the role played by the CPB. It also provides an overview of its history. Three periods are distinguished: the balanced budget as official principle (1814-1956), Keynesian deficit norms (1957-1979) and norms for reducing deficit and debt (1980-present).

Suggested Citation

  • Frits Bos, 2007. "The Dutch fiscal framework; history, current practice and the role of the CPB," CPB Document 150, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:docmnt:150
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    References listed on IDEAS

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    1. Casper van Ewijk & Nick Draper & Harry ter Rele & Ed Westerhout, 2006. "Ageing and the sustainability of Dutch public finances," CPB Special Publication 61.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Wyplosz, Charles, 2005. "Fiscal Policy: Institutions versus Rules," National Institute Economic Review, National Institute of Economic and Social Research, vol. 191, pages 64-78, January.
    3. F. J. H. Don & J. P. Verbruggen, 2006. "Models and methods for economic policy: 60 years of evolution at CPB," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 60(2), pages 145-170, May.
    4. Harry ter Rele, 2005. "Measuring lifetime redistribution in Dutch collective arrangements," CPB Document 79, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Bos, Frits, 2007. "Use, misuse and proper use of national accounts statistics," MPRA Paper 2576, University Library of Munich, Germany.
    6. Frits Bos, 2006. "The development of the Dutch national accounts as a tool for analysis and policy," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 60(2), pages 225-258, May.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational Accounts: A Meaningful Alternative to Deficit Accounting," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 55-110, National Bureau of Economic Research, Inc.
    8. Casper van Ewijk & Nick Draper & Harry ter Rele & Ed Westerhout, 2006. "Ageing and the sustainability of Dutch public finances," CPB Special Publication 61, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Barry Anderson & Joseph J. Minarik, 2006. "Design Choices for Fiscal Policy Rules," OECD Journal on Budgeting, OECD Publishing, vol. 5(4), pages 159-208.
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    Citations

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    Cited by:

    1. Sweder Wijnbergen & Alexander France, 2012. "Assessing Debt Sustainability in a Stochastic Environment: 200 Years of Dutch Debt and Deficit Management," De Economist, Springer, vol. 160(3), pages 219-236, September.
    2. Carmen M. Reinhart & Vincent R. Reinhart & Kenneth S. Rogoff, 2012. "Public Debt Overhangs: Advanced-Economy Episodes since 1800," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 69-86, Summer.
    3. Beetsma, Roel & Giuliodori, Massimo & Walschot, Mark & Wierts, Peter, 2013. "Fifty years of fiscal planning and implementation in the Netherlands," European Journal of Political Economy, Elsevier, vol. 31(C), pages 119-138.
    4. Carmen M. Reinhart & Takeshi Tashiro, 2013. "Crowding out redefined: the role of reserve accumulation," Proceedings, Federal Reserve Bank of San Francisco, issue Nov, pages 1-43.
    5. Carmen M. Reinhart, 2010. "This Time is Different Chartbook: Country Histories on Debt, Default, and Financial Crises," NBER Working Papers 15815, National Bureau of Economic Research, Inc.
    6. Thiess Buettner & Bjoern Kauder, 2010. "Revenue Forecasting Practices: Differences across Countries and Consequences for Forecasting Performance," Fiscal Studies, Institute for Fiscal Studies, vol. 31(3), pages 313-340, September.
    7. Jasper Lukkezen & Hugo Rojas-Romagosa, 2012. "When is debt sustainable?," CPB Discussion Paper 212, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Charles Wyplosz, 2012. "Fiscal Rules: Theoretical Issues and Historical Experiences," NBER Chapters, in: Fiscal Policy after the Financial Crisis, pages 495-525, National Bureau of Economic Research, Inc.
    9. Thiess Büttner & Björn Kauder, 2008. "Methods of Revenue Forecasting: An International Comparison," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 44, July.
    10. Jasper Lukkezen & Hugo Rojas-Romagosa, 2016. "A Stochastic Indicator for Sovereign Debt Sustainability," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 72(3), pages 229-267, September.
    11. 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.

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    More about this item

    JEL classification:

    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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