EMU Fiscal Rules: What Can and Cannot be Exported

Fiscal Rules from a Political Economy Perspective

“…First of all, many fiscal rules have both explicit monitoring of the fiscal authority by some other agency, as well as explicit penalties. In the case of the Maastricht fiscal criteria, "significant divergences" of budgetary positions from the medium term budgetary objectives trigger "early warnings," and the Stability and Growth Pact spells out the type and scale of sanctions in the event of persistent excessive deficit, the Excessive Deficit Procedure (see Buti and Giudice [2002] for a discussion). Australia, Canada, New Zealand, and the U.K. have very similar monitoring and reporting requirements with external auditing and ministerial responsibility for the results (see Craig and Manoel [2002]).…”

The Monetary Consequences of a Free Trade Area of the Americas

“…These were famously provided in Europe through of the Short-Term and Very-Short-39 Some European observers would not reach equally pessimistic conclusions about the efficacy of mutual surveillance. See for example Buti and Giudice (2002). But even they would acknowledge that "it is not clear whether the political economy factors which underpinned the success of Maastricht consolidation can be recreated in Latin America" (p. 1).…”

Discretionary Measures and Automatic Stabilizers in the Croatian Fiscal Policy

“…Based on these calculations the European Commission is able to determine whether the member states' position is strong enough to guarantee that the actual budget deficit does not exceed the threshold of three percent of GDP during a cyclical downturn (European Commission, 2006). In this way the European Commission accents that fiscal stabilization should be primarily left to automatic stabilizers, while discretionary fiscal policy should be an exemption (Buti and van den Noord, 2004).…”