Back Matter

Back Matter

Author(s):
George Kopits
Published Date:
December 2004
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    References

    Author Index

    Acharya, S., 217

    Aghion, P., 39

    Ahluwalia, M., 203, 216

    Albuquerque, P.H., 79

    Alesina, A., 19, 22, 28, 78, 94, 107, 112, 113, 197, 218

    Allan, W., 80

    Allsop, C., 10

    Alt, J.E., 184

    Ardagna, S., 78, 217

    Artis, M.J., 10

    Aslaksen, I., 178

    Aziz, J., 78

    Bacha, E.O., 129

    Balassone, F., 8, 219–34

    Barnhill, T., 52

    Barrell, R., 233

    Barro, R.J., 16, 52, 131, 164

    Begg, D., 78

    Bertola, G., 78

    Besley, T.A., 10

    Bevilaqua, A.S., 197, 218

    Bier, A., 65

    Bird, R.M., 241

    Bjerkholt, O., 7, 65, 164–78

    Blanchard, O., 80

    Blejer, M., 78

    Blondal, J., 222

    Bohn, H., 184

    Brailovsky, V., 178

    Braun, M., 7, 61, 183–97, 206, 216

    Brunila, A., 112, 163, 221, 233

    Buchanan, J., 18

    Buiter, W.H., 80, 146–7, 155, 160

    Burnside, C., 78

    Buti, M., 6, 21, 97–113, 149, 154, 158, 163, 220, 221, 233

    Caballero, R.J., 106

    Cabral, A.J., 112, 221

    Calvert, R.L., 185, 187

    Calvo, G., 10, 51, 77, 78

    Cappelen, Å., 178

    Cardoso, E., 129

    Casella, A., 226

    Cashin, P., 65

    Catão, L., 34

    Chamon, M., 39, 51, 52

    Chari, V.V., 233

    Coase, R., 225

    Coelho, I., 79

    Cole, H.L., 233

    Conesa, A., 6, 131–45

    Corden, W.M., 178

    Coricelli, F., 7, 146–62

    Corsetti, G., 23, 39, 78

    Costello, D., 112

    Courchene, T.J., 249

    Craig, J., 10, 21, 80, 144, 197, 222, 233

    Creel, J., 163

    Csajbók, A., 163

    Csermely, Á., 163

    Cuddington, J., 65

    Cukierman, A., 80

    Daniel, J., 79, 128

    Darvas, Z., 163

    Davis, J., 179

    De Ferranti, D., 54–6

    de Haan, J., 233

    Detragiache, E., 34

    Dillinger, W., 197, 248

    Dixit, A.K., 197

    Dooley, M.P., 78

    Drazen, A., 5, 15–29, 78, 134, 188

    Dury, K., 233

    Dziobek, C., 79

    Easterly, W., 147

    Eaton, J., 51

    Echavarría, J., 197, 242

    Eichengreen, B., 39, 52, 64, 99, 107, 113, 192, 217

    Einaudi, L., 233

    Elster, J., 20, 26, 29

    Engel, E., 178

    Ercolani, V., 7, 146–63

    Fatas, A., 10

    Favero, C., 129

    Fiess, N., 65

    Fischer, J., 99, 102, 227, 228

    Fischer, S., 78, 107, 113

    Fitoussi, J.P., 163

    Flood, R.P., 78

    Franco, D., 8, 219–34

    Friedman, D., 234

    Gamboa, R., 197

    Gavin, M., 51, 55, 64, 65, 80, 104–108, 112, 113

    Gelb, A.H., 178

    Gersovitz, M., 51

    Ghosh, A., 78

    Ghymers, C., 109, 112

    Giavazzi, F., 129

    Gil-Díaz, F., 132, 145

    Giudice, G., 6, 21, 64, 97–113, 233

    Giugale, M.M., 243

    Gjelsvik, E., 178

    Guidotti, P., 112

    Goldfajn, I., 6, 114–130

    Goldstein, M., 128

    Gonzalez, C.Y., 8, 235–48

    Gordon, D.B., 16, 131

    Gourinchas, P.O., 112

    Grafe, C., 146, 147, 155, 160

    Grilli, V., 19

    Guardia, E.R., 6, 114–30

    Gylfason, T., 178

    Hagemann, R., 49, 64

    Hallerberg, M., 81, 87, 221, 228

    Harden, I.J., 22, 98, 99

    Hausmann, R., 5, 21, 28–52, 80, 107, 108, 112–113, 178

    Heller, P., 10, 78

    Hemming, R., 78, 218

    Hercowitz, Z., 19

    Hernández-Trillo, F., 198, 233

    Hodrick, R., 163

    Huertas, M., 242

    Iaryczower, M., 197

    Inman, R.P., 103, 184

    Kennedy, S., 185

    King, G., 163

    Kletzer, K., 112

    Kneller, R., 78

    Knight, B., 233

    Kochhar, K., 7–8, 198–218

    Kopits, G., 1–10, 25, 28, 52, 66–80, 95, 103, 113, 129, 130, 144, 163, 179, 183, 197, 248

    Krueger, A., 65

    Krugman, P., 65, 77, 78

    Kydland, F.E., 80, 131

    Lahiri, A., 201, 204

    Lane, P.R., 106

    Lane, T.D., 222

    Levinson, B.A., 233

    Liuksila, C., 249

    Lowry, R.C., 184

    Mackenzie, G.A., 79, 80

    Manasse, P., 34

    Mancowizk, B., 39

    Manoel, A., 21, 144

    Marcel, M., 65, 145

    Marion, N.P., 78

    Marshall, W.J., 197

    Masson, P.R., 78

    Mayer, J., 178

    McCallum, B., 29

    McGranahan, L., 233

    McKinnon, R.I., 98

    Meltzer, A.H., 80

    Mihov, I., 10

    Milesi-Ferretti, G.M., 22, 23

    Mills, P., 163

    Mishkin, F.S., 10

    Monacelli, D., 233

    Montanino, A., 112

    Musgrave, P.B., 223

    Musgrave, R.A., 223, 235

    Mussa, M., 64

    Neary, J.P., 178

    Nicolini, J., 197

    Niculescu, I., 7, 65, 164–79

    Niskanen, W., 18, 28

    Norman, V.D., 178

    North, D., 197

    Oates, W.E., 235

    Obstfeld, M., 78

    Pagano, M., 78, 100

    Panizza, U., 39, 50–52

    Parry, T., 80

    Patashnik, E.M., 90

    Patnaik, I., 217

    Pazarbasioglu, C., 79

    Peltzman, S., 28, 197

    Perotti, R., 22, 28, 64, 94, 112, 113, 197

    Perry, G., 5, 53–65, 242

    Persson, T., 10, 19

    Pigou, A.C., 233

    Poterba, J.M., 10, 86, 87, 94, 98, 113, 129, 184

    Prasad, A., 218

    Prescott, E.C., 80, 131, 163

    Przeworski, A., 186, 187

    Purfield, C., 7–8, 198–218

    Quinet, A., 163

    Radelet, S., 78

    Rangarajan, C., 216, 217

    Rebelo, S., 147, 163

    Reinhart, C.M., 34, 51, 77

    Rezende da Silva, F., 128

    Robbins, J., 185

    Rodríguez, F., 178

    Rødseth, A., 179

    Rosenblatt, D., 8, 235–49

    Roubini, N., 23, 85, 94

    Rust, J., 233

    Saal, M., 79

    Sachs, J.D., 78, 85, 94, 178

    Saiegh, S., 193, 195, 197

    Saint-Paul, G., 106

    Sanguinetti, J., 197

    Sanguinetti, P., 248

    Santaella, J.A., 144

    Sapir, A., 98, 112, 149, 154, 233

    Schick, A., 6, 65, 77, 81–95, 134

    Schwartz, G., 113, 249

    Schwartz, M.J., 6, 131–45

    Servén, L., 54, 64

    Shah, A., 217

    Shome, P., 201

    Silva Filho, T.N.T., 130

    Simon, A., 163

    Singh, B., 218

    Smith, S., 227

    Somuano, A., 6, 131–45

    Spilimbergo, A., 34

    Spiller, P., 191, 193

    Srinivasan, T.N., 205

    Srivastava, D.K., 216, 217

    Stark, J., 112

    Stein, E., 107, 113, 144, 248

    Stourm, R., 94

    Strauch, R.R., 90

    Strawczynski, M., 19

    Suescún, R., 55, 64

    Summers, L., 78

    Sundelson, J.W., 94

    Sutton, B., 34

    Svensson, L.E.O., 19

    Symansky, S., 10, 25, 28, 80, 103, 129, 144, 183, 232

    Tabellini, G., 10, 19

    Talvi, E., 106, 113

    Tamirisa, N.T., 78

    Tanzi, V., 78, 79

    Teijeiro, M., 51, 68, 79, 80

    Ter-Minassian, T., 110–13, 221, 222, 233

    Thirsk, W., 132

    Tijerina, J.A., 6, 131–45

    Tirole, J., 39

    Tommasi, M., 7, 61, 183–97, 206, 216, 248, 249

    Tornell, A., 106

    Treasury, H.M., 158

    Valdés, R.O., 178

    van den Noord, P., 163

    van Wijnbergen, S., 178

    Végh, C.A., 106, 113

    Verma, A.L., 218

    Vial, J., 80

    von Hagen, J., 10, 22, 81, 86, 90, 94, 98, 99, 100, 129, 163, 192

    Wagner, R.E., 18, 107

    Warner, A.M., 178

    Watts, R., 207

    Webb, S.B., 8, 191, 235–49

    Weingast, B.R., 197, 216

    Wildavsky, A.B., 84, 112

    Williamson, O.E., 90

    Wren-Lewis, S., 113

    Wyplosz, C., 64, 113

    Zotteri, S., 8, 219–34

    Subject Index

    absorption rule, 139, 140, 141, 143

    accession countries (ACs) see EU accession countries

    accountability, 9, 83, 213

    • see also transparency

    accounting, 98, 99, 110, 131

    • accrual, 75, 92, 93

    • cash, 93

    • India, 207

    • subnational rules, 232

    • see also creative fiscal accounting

    acquired rights, 72–3, 74

    adjustment issues

    • constraints on adjustment, 72–3

    • Europe, 99–101

    • quality of adjustment, 71–2, 101

    allocative inefficiency, 190, 232

    Andean Community, 109–10

    Annual Budget Guidelines Law (LDO), Brazil, 123, 124, 125

    Argentina

    • budget deficit, 80n35, 237, 246

    • budget-balance rule, 2, 3, 4

    • consumption cycle, 108

    • currency board, 2, 69

    • debt ratio, 30, 41

    • decentralization, 4, 10, 132, 192

    • expenditure control, 72

    • external debt, 79n22

    • failure with subnational fiscal rules, 7, 63

    • federalism, 192–6

    • fiscal crisis, 56, 57, 68, 75, 191

    • fiscal discipline, 185

    • fiscal performance, 237–8

    • fiscal responsibility law, 59, 61

    • import gap, 44, 45

    • intergovernmental transfers, 63, 64, 236, 238–40, 245–6

    • optimal currency area, 52n17

    • pensions, 74

    • procyclical fiscal policy, 56, 63, 64

    • taxation, 79n30

    • uniform import surcharge, 80n32

    Asian financial crisis, 67, 69, 75, 120

    assets, 77n5, 129n9, 167, 168

    asymmetric information, 18, 56, 57, 58, 66, 67

    audit mechanisms, 4–5, 9, 21, 91, 158, 214

    • see also monitoring

    Australia

    • budget restructuring, 88

    • monitoring mechanisms, 21

    • transparency, 132

    Austria

    • accounting practices, 232

    • federalism, 219–20, 227

    • subnational expenditure, 228, 229

    automatic stabilizers, 9, 48, 53, 57–8, 61, 63

    • balanced-budget rule, 76

    • capital account crises, 70

    • EMU stabilization, 221

    • EU accession countries, 147

    • Latin America, 108

    • Mexico, 135, 144

    • positive effects, 154

    • rule design, 59

    • Stability and Growth Pact, 102, 108, 220

    • structural balance rule, 137

    • structural deficit indicator, 150

    balanced-budget rules see budget-balance rules

    banking

    • Asian financial crisis, 69

    • Brazil, 119, 120

    • Colombia, 242

    • fiscal adjustment, 72

    • India, 203

    • Mexico, 140

    • structural reform, 73–4

    Belgium

    • debt ratio, 30

    • decentralization, 231

    • federalism, 219–20, 227

    • subnational expenditure, 228, 229

    benefits, 74, 84, 85

    • see also social security; unemployment benefits

    booms, 56, 57, 58, 59, 64, 65n4, 236

    Brazil, 114–30

    • Annual Budget Guidelines Law (LDO), 123, 124, 125

    • banking supervision, 74

    • budget-balance rule, 2, 3, 137

    • capital account crisis, 68, 69

    • credibility, 49–50

    • debt ratio, 30, 32, 41, 65n14

    • debt rule, 3, 4

    • debt-restructuring package, 122, 213

    • decentralization, 4, 10, 119, 215

    • domestic currency debt, 43

    • enforcement penalties, 58

    • fiscal discipline, 185

    • fiscal impulse, 78n13

    • fiscal responsibility law, 6, 61, 93, 110, 115, 121–4, 128

    • inflation-targeting, 2

    • pensions, 74

    • primary surplus, 49, 65n13, 76, 79n21, 114, 116, 118–19, 121

    • quantitative targets, 132

    • sanctions, 5

    • state revenue, 248

    • subnational rules, 185, 215

    • taxation, 79n30

    budget

    • constraints, xii, 15, 30, 87, 99: Brazil, 125; Colombia, 241, 242; India, 213, 214; market-preserving federalism, 216; Mexico, 244

    • EMU rules, 219, 223–4, 225, 226

    • innovations, 91–2

    • maximization, 18–19

    • Mexico, 136, 244

    • process, 23, 24, 81, 82–5, 86, 98, 124, 214

    • resource-abundant countries, 166

    • solvency, 125

    • stabilizing transfer rules, 236

    • structural balance computation, 148–54

    • see also budget-balance rules; debt; deficit bias; government expenditure; primary balance

    budget deficit, 9, 15

    • Argentina, 80n35, 237, 246

    • Brazil, 116

    • capital account crises, 66, 67, 69

    • EMU rules, 99, 107, 220, 221, 223–4

    • EU accession countries, 7, 146, 147, 151, 154, 155–6, 160

    • European countries, 97, 230–1

    • fiscal illusion, 18

    • fiscal stance, 78n13

    • Germany, 24, 88, 89–90;

    • and growth, 146–7

    • India, 199, 205, 206, 208, 209, 211, 215

    • Latin America, 104–6, 107, 109, 110

    • Mexico, 135, 243

    • Norway, 165

    • procedural restructuring, 88

    • procyclical fiscal policy, 57, 63

    • Stability and Growth Pact, 102–3, 146

    • structural balance rules, 62, 64, 157, 159

    • Venezuela, 170

    • see also debt; deficit bias

    budget-balance rules, 2, 3, 9, 23

    • Argentina, 196

    • Brazil, 122–3

    • constitutional provision, 26, 27

    • cyclical adjustments, 49

    • debt structure, 50

    • Mexico, 6–7, 11n10, 136, 137, 141–2, 143, 144

    • political constraints, 91

    • resource-abundant countries, 169

    • signaling commitment, 76

    • structural close-to-balance rule, 156–8, 159, 160

    • subnational, 131

    Bulgaria, uniform import surcharge, 80n32

    business cycle, 40, 44, 97, 108, 131, 132

    Canada

    • debt ratio, 30

    • equalizing transfers, 249n14

    • monitoring mechanisms, 21

    capital account crises, xii, 5, 9, 66–9, 72, 75, 76–7

    • see also financial crises

    capital flight, 70, 74, 75, 84

    capital mobility, xii, 1–2, 5, 66–80

    Caribbean

    • procyclical fiscal policies, 53, 54–7

    • volatility, 53

    cash flow, 166, 167

    central bank autonomy, 131

    Central and Eastern Europe, 1, 7, 103

    Chile

    • budget-balance rule, 2, 3, 76

    • centralization, 4

    • commodity stabilization fund, 59, 60, 113n19

    • countercyclical fiscal policy, 56

    • debt ratio, 41

    • fiscal conservatism, 65n10

    • fiscal performance, 93

    • fiscal risk, 51

    • inflation-targeting, 2

    • institutional infrastructure, 80n37

    • policy guideline, 4, 9

    • structural balance rule, 4, 62, 63, 137, 145n16

    • structural surplus, 108, 145n14

    coalition regimes, 81, 87, 88, 89, 198

    Cohesion Fund, 146, 155

    Colombia

    • budget-balance rule, 2, 3

    • commodity stabilization fund, 59, 60, 113n19

    • debt ratio, 41

    • debt rule, 3

    • decentralization, 4, 240, 241

    • earmarking of revenue, 72

    • expenditure control, 72

    • fiscal crisis, 56, 57, 75

    • fiscal discipline, 185

    • fiscal performance, 240–1

    • fiscal responsibility law, 61

    • inflation-targeting, 2

    • intergovernmental transfers, 63, 64, 236, 240–3, 246–7

    • sanctions, 5

    • taxation, 79n30

    commitment, 24–5, 87–8, 89, 90, 91, 98, 123

    commodity stabilization funds, 9, 59–61, 113n19, 169, 178

    • Mexico, 133, 134, 135, 137–8

    • Norway, 60, 170, 171–2, 173, 174

    • Venezuela, 7, 59, 60, 165, 170, 174–7

    commons problem, 107

    compliance see enforcement

    comprehensiveness, 82

    constitutional provision, 4, 5, 9, 20, 26–7

    • Argentina, 195

    • Brazil, 129n4

    • Mexico, 136, 144

    • Venezuela, 174, 176, 177

    constitutionalism, 26–7, 29n12

    consumption

    • capital account crises, 70

    • Latin America, 106, 108

    • resources, 167, 168

    contagion, 109

    contingency funds, 2–4

    contingent liabilities, 69, 74, 75, 92, 94n2

    • India, 200, 217n4

    • Mexico, 144n5, 247

    • resources, 168

    • stabilizing transfers, 8, 61, 247

    • see also hidden liabilities

    convergence

    • European, 7, 99, 100, 103

    • Latin America, 108–10, 111

    • see also integration

    cooperation

    • determinants of, 191–2

    • fiscal game, 188

    • intertemporal, 191, 194

    • problems, 189

    • subnational rules, 8, 222, 227, 230, 231, 232

    corporate borrowing, 52n11

    corruption, 93

    Costa Rica

    • debt ratio, 41

    countercyclical fiscal policy, 5, 9, 50, 53, 57

    • commodity stabilization funds, 60

    • credibility, 58, 59

    • deficit bias, 19

    • discretion, 4, 9, 80n43

    • EU deficit threshold, 220

    • Latin America, 56

    • structural balance rules, 62, 157

    • subnational level, 235

    creative fiscal accounting, 15–16, 22, 23, 58, 98

    • EU candidate countries, 147

    • expenditure audit, 158

    • subnational government finance, 222

    credibility, xii, 1, 8, 10, 20–1

    • Brazil, 49–50, 116, 122, 128

    • budget commitments, 87, 90, 91

    • capital account crises, 77

    • commitment to unchanging rules, 25–6, 27

    • constitutionalism, 26

    • countercyclical fiscal policy, 58

    • cyclical adjustments, 49

    • discretion, 16

    • fiscal discipline, 15, 25

    • fiscal expansion, 56

    • India, 215

    • Mexico, 135

    • monetary policy, 39

    • penalties, 29n8

    • predictability, 17

    • procyclical fiscal policy, 63

    • rule flexibility, 22–3, 58–9

    • signaling, 71, 76

    • structural balance rule, 62, 64

    • transparency, 4, 75, 77

    credit ratings, 30, 31–3, 38, 47, 49, 51, 107

    CSM see cyclical safety margin

    currency

    • crises, 5, 34, 66, 67–70, 73–4, 75, 104

    • depreciation, 40

    • domestic currency debt, 43–4, 50, 52n11, 201

    • foreign currency debt, 38–40, 47–8, 52n11, 75, 107

    • see also exchange rate

    currency boards, 2, 69, 79n22

    current-balance rule, 2

    • see also golden rule

    cyclical safety margin (CSM), 149–50, 151

    Czech Republic, capital account crisis, 67, 68, 69, 78n12

    debt, 1, 2, 5, 30–52, 190, 222

    • Brazil, 114–30

    • ceilings, 147

    • crises, 34

    • EU constraints, 24

    • euro area, 105

    • Economic and Monetary Union, 98, 107

    • GDP ratio, 4, 9, 30–2, 38, 40, 45–7: Brazil, 114, 116–19, 123, 125–6, 128; India, 7–8, 208, 209, 212; Latin America, 106; Maastricht rules, 99, 100, 220; Mexico, 140, 142

    • golden rule, 20

    • growth of, 15, 28

    • India, 7–8, 198, 199–202, 208–13, 215, 217n4

    • Latin America, 7, 57, 105, 106, 107, 110

    • Mexico, 132, 137, 139–41, 142

    • national fiscal council, 111

    • net public debt concept, 129n9

    • political arrangements, 85

    • public debt management, 75

    • servicing: Brazil, 122; currency devaluations, 73; Latin America, 30, 32, 34–5, 40, 43–4, 47–9, 50

    • stabilizing transfers, 247

    • structural balance rule, 64

    • subnational: Argentina, 7, 239, 240, 246; Brazil, 119–20, 121–2, 123, 128; Colombia, 240, 242–3, 246; India, 206, 209, 213; Mexico, 133, 134, 143, 243, 244–50

    • sustainability, 76, 77, 160: Brazil, 6, 114–16, 119, 125–8; definition, 145n19; India, 208–13; Mexico, 137, 139–41, 142, 144

    • see also budget deficit; deficit bias; public sector borrowing requirement

    debt rules, 3, 4, 115

    • Brazil, 123

    • Mexico, 139–41, 143

    • signaling commitment, 76

    decentralization, 4, 222, 231

    • Argentina, 4, 10, 132, 192

    • Brazil, 4, 10, 119, 215

    • Colombia, 4, 240, 241

    • EMU fiscal rules, 219, 220, 224–5, 226, 230

    • enforcement, 9–10

    • fiscal, 72

    • India, 7, 132, 198–218

    • Mexico, 4, 243

    • see also federalism; subnational rules

    deficit bias, xii, 16–19, 22, 28, 53, 64n2

    • Brazil, 123

    • fiscal responsibility laws, 61

    • Latin America, 57, 62, 108

    • Mexico, 134, 136, 143

    • political pressures, 60, 62

    • procyclical fiscal policy, 56, 57, 62

    • rule flexibility, 59

    • Venezuela, 176

    • see also budget deficits; debt

    deficit illusion, 18

    Denmark

    • debt-revenue ratio, 31–2

    • subnational expenditure, 228

    depletion policy, 167

    deregulation, 238–9

    devaluations, 67, 73

    discretion, 1, 16, 17, 108

    • Argentina, 192, 195

    • countercyclical, 4, 9, 80n43

    • cyclical adjustments, 49

    • intergovernmental transfers, 241, 242, 244, 245

    • procyclical, 76

    dollarization, 2, 40, 48, 51

    downturns, 56, 57–8, 107, 151, 236–7, 240, 246

    • see also recession

    due process in budgeting, 82–3, 85

    “Dutch disease”, 89, 166

    earmarking revenue, 72, 136–7, 241, 244

    ECB see European Central Bank

    ECLAC see Economic Commission for Latin America and the Caribbean

    ECOFIN see European Union Council of Economy and Finance Ministers

    Economic Commission for Latin America and the Caribbean (ECLAC), 113n22

    economic cycles

    • EU fiscal adjustment, 146

    • impact on budget, 148, 158

    • Mexican fiscal rules, 143

    • procyclical fiscal policies, 53

    • stabilizing transfer rules, 8

    • subnational governments, 229

    Economic and Monetary Union (EMU), 1, 6, 97–113

    • Central and Eastern Europe, 7

    • subnational rules, 8, 219–34

    • see also European Union; Maastricht Treaty; Stability and Growth Pact

    Ecuador

    • budget-balance rule, 2, 3, 4

    • debt ratio, 41

    • debt rule, 3

    • dollarization, 2

    • earmarking of revenue, 72

    • fiscal crisis, 56, 67, 68, 69

    • fiscal responsibility law, 61

    • moral hazard, 74

    • oil stabilization fund, 59, 60, 169

    • taxation, 79n23, n30, n31

    • value-at-risk methodology, 52n16

    EDP see Excessive Deficit Procedure

    education, 54, 55–6, 174, 247

    electorate support, 8–9, 18

    EMU see Economic and Monetary Union

    endowment funds, 169

    enforcement, 9–10, 21, 90, 186

    • Argentina, 194

    • budgeting principles, 82–3

    • game theoretic approach, 186, 187–8

    • India, 207, 214

    • lack of, 183

    • Maastricht Treaty, 27

    • political commitment, 88

    • self-enforcement, 185, 187–8, 214

    • Stability and Growth Pact, 6

    • subnational rules, 183, 184, 223

    • targets, 92

    • technologies of, 192;

    • see also monitoring; penalties; sanctions

    entitlements, 85

    environmental pollution, 226

    equity, intergenerational, 168, 175

    Estonia

    • budget-balance rule, 3, 4, 76

    • currency board, 2

    • fiscal performance, 93

    • policy guideline, 4, 9

    ethical issues, 20

    European Central Bank (ECB), 98, 156

    European Commission, 102, 104, 113n22, 146, 147, 148–9, 158–9, 221

    European Union Council of Economy and Finance Ministers (ECOFIN), 27, 29n13, 99, 102, 220, 221, 223

    European Union (EU)

    • countercyclical fiscal policy, 53

    • deficit constraints, 23–4

    • enlargement, 7, 146–63

    • numerical targets, 29n9

    • procyclical fiscal policy, 154

    • quantitative targets, 132

    • rule-based fiscal policy, 1

    • subnational rules, 8, 185, 219–34

    • see also Economic and Monetary Union; Maastricht Treaty; Stability and Growth Pact

    exceptionality, 102

    EU accession countries, 146–63

    Excessive Deficit Procedure (EDP), 21, 101, 102–3

    exchange rate

    • Brazil, 114–15, 117, 125, 126–7, 128, 130n20

    • budget balance adjustments, 108

    • debt servicing, 32

    • dollarization, 51

    • fiscal risk, 50

    • fiscal sustainability, 78n9

    • floating, 50–1

    • foreign currency debt, 39, 40, 52n11

    • import gap, 44, 45

    • instability, 109

    • pegs, 66, 67, 69

    • shocks, 45, 46, 47, 106

    • volatility, 39, 40, 41–2, 47, 52n12

    • see also currency

    expectations, 16, 67, 71

    • credible commitments, 90

    • due process, 83

    expenditure rules, 2, 9, 76, 115–16, 123, 147

    • see also government expenditure

    Federal Expenditure Budget (PEF), Mexico, 133, 134, 135, 136–7

    Federal Revenue Law (LIF), Mexico, 135, 136

    federalism, 4, 89, 219–20

    • Argentina, 192–6

    • EMU fiscal rules, 220–4

    • fiscal, 220–4, 235

    • market-preserving, 216

    • see also decentralization; subnational rules

    finance ministers, 23, 58, 81, 86, 87, 89

    financial crises, 5–6

    • contagion, 109

    • procyclical fiscal policy, 56, 64

    • vulnerability, xii, 1, 104

    • see also capital account crises; shocks

    financial markets

    • reputation, 76

    • volatility, 55

    financial transactions tax, 74, 239

    Finland

    • cyclical component of balance, 149

    • subnational expenditure, 228

    fiscal discipline, 15, 16, 19, 24–5, 81

    • Brazil, 115, 125, 128

    • budget practices, 82, 86

    • EU accession countries, 159

    • fiscal rules impact on, 183, 185

    • Germany, 89

    • Latin America, 104

    • Mexico, 132, 134, 135

    • Netherlands, 89

    • political commitment to, 87, 98

    • resource-abundant countries, 177

    • Stability and Growth Pact, 103

    • subnational governments, 221–2

    • targets, 91

    fiscal illusion, 18

    fiscal impulse, 78n13, 166

    fiscal policy

    • capital account crises, 66–9

    • capital mobility, 66–80

    • constraints, xii, 15

    • countercyclical, 5, 9, 50, 53, 57: commodity stabilization funds, 60; credibility, 58, 59; deficit bias, 19; discretion, 4, 9, 80n43; EU deficit threshold, 220; Latin America, 56; structural balance rules, 62, 157; subnational level, 235

    • execution procedures, 15

    • procyclical, 6, 28, 47, 48, 64, 106–7: Argentina, 238; booms, 59; capital flight, 70; causes of, 56–7; credibility problems, 63; cyclical safety margin, 150; deficit limit, 155, 156; discretion, 76; effects of, 54–6; EMU fiscal rules, 223; EU candidate countries, 7, 147, 151–4, 159–60; Europe, 97; fiscal responsibility laws, 61; Mexico, 243; resource-abundant countries, 164, 166; subnational rules, 225; volatility, 5, 53, 54, 55, 62

    • see also fiscal rules; policy signaling

    Fiscal Responsibility and Budget Management Law (FRBM), India, 7–8, 199, 205–14, 216

    Fiscal Responsibility Law (FRL), 4, 61, 110–11

    • Brazil, 6, 61, 93, 110, 115, 121–4, 128

    • flexibility, 59

    • India, 7–8, 199, 205–14, 216

    • Mexico, 6

    • New Zealand, 4, 80n43, 116, 131

    • structural balance rules, 63

    • see also legislation

    fiscal rules, xii, xiii, 1–11

    • Brazil, 114–30

    • commitment to, 87, 88

    • definition, 2, 15, 115, 131, 183

    • effectiveness, 19–22, 82, 184–5

    • EU enlargement, 146–63

    • European Economic and Monetary Union, 97–113, 219–34

    • India, 198–218

    • Mexico, 131–45

    • numerical, 9–10, 22–4, 98, 99, 111

    • origin of, 184, 185–6

    • policy rules, 1–5, 8–9, 22–3, 76, 115–16, 131, 137–43

    • political economy perspective, 15–29

    • political issues, 85, 87, 88, 91

    • procedural rules, 5, 15, 22–4, 81, 82–3, 98–9, 123, 131

    • reduction of macroeconomic volatility, 53–65

    • resource-abundant countries, 164–79

    • stabilizing transfers, 8, 10, 59, 61, 63–4, 235–49

    • volatility, 53–65

    • see also budget-balance rules; debt rules; expenditure rules; “golden rule”; structural balance rule; subnational rules; targets

    fiscal stance, 78n13

    flexibility

    • credibility of rules, 22–3, 58–9

    • EMU fiscal rules, 219, 220, 223, 224

    • intergovernmental transfers, 247

    foreign currency debt, 38–40, 47–8, 75, 107

    France

    • debt, 100

    • deficit limit, 154

    • fiscal discipline, 99

    • subnational expenditure, 228

    FRBM see Fiscal Responsibility and Budget Management Law, India

    free-rider problem, 19, 221, 223

    FRL see Fiscal Responsibility Law

    game theory, 7, 183–97

    GDP see gross domestic product

    Germany

    • balanced-budget rule, 131

    • budget deficit, 24, 112n7, 154, 155

    • budget restructuring, 88

    • debt, 100

    • federalism, 89, 219–20, 227

    • fiscal discipline, 99

    • subnational expenditure, 228, 229, 234n20

    golden rule, 2, 20, 228

    • Brazil, 122–3

    • “compensated”, 227, 230

    • EU accession countries, 151, 156, 159

    • India, 207

    • Mexico, 137

    • Venezuela, 176

    government expenditure

    • Argentina, 238

    • Brazil, 119, 121, 125

    • budgeting process, 82, 84

    • controls on, 72

    • cuts in, 100, 101

    • deficit bias, 18, 19, 60–1

    • emerging economies, 93

    • EMU fiscal rules, 223, 224

    • EU accession countries, 152

    • fiscal illusion, 18

    • “gap” plus elasticity approach, 148–9

    • Germany, 89–90

    • high spending, 190

    • India, 201, 202–3, 208–9, 212, 214–15, 216

    • Mexico, 132, 134, 135, 136, 138

    • Norway, 170, 174

    • stabilizing intergovernmental transfers, 61, 63, 235–49

    • structural close-to-balance rule, 156–7, 158, 159

    • subnational, 61, 63, 223–4, 228–9, 231–2, 235–49

    • Venezuela, 174–5

    • see also budget; expenditure rules; investment

    Gramm–Rudman-Hollings Deficit Reduction Act, 21–2, 25, 27

    Greece

    • fiscal adjustment, 100–1

    • investment, 223

    gross domestic product (GDP)

    • cyclical component of balance, 149

    • debt ratio, 4, 9, 30–2, 38, 40, 45–7: Brazil, 114, 116–19, 123, 125–6, 128; India, 7–8, 208, 209, 212; Latin America, 106; Maastricht rules, 99, 100, 220; Mexico, 140, 142

    • deficit limit, 53, 146, 155, 220

    • EU accession countries, 151, 152, 153, 159

    • growth, 43, 54, 55, 139–40, 152, 204

    • revenue ratio, 150, 151, 154, 214

    • shocks, 45, 46, 47

    • social expenditures, 56

    • structural balance rule, 62

    • volatility, 37, 38

    growth, xii, 4, 55

    • Brazil, 116, 125, 126, 128

    • budget deficits, 146–7

    • India, 198, 199, 204–5, 209, 212–13

    • M4, 145n24

    • Mexico, 135, 139–40

    • Netherlands, 89

    • resource-abundant countries, 164, 177

    • structural close-to-balance rule, 157

    • volatility, 54

    guarantees, 237, 245, 248

    hidden liabilities, 114, 115, 117, 125, 128

    • see also contingent liabilities

    Honduras, decline in GDP growth, 43

    human capital, 54, 55, 188

    Hungary

    • fiscal indicators, 150, 151, 152, 160, 161

    • uniform import surcharge, 80n32

    IFIs see international financial institutions

    IMF see International Monetary Fund

    implementation, 4–5

    import gaps, 44, 45

    import surcharge, 74–5, 80n32

    incrementalism, 84, 85

    India

    • budget-balance rule, 2, 3

    • debt ratio, 7–8, 30

    • decentralization, 4, 7, 10, 132, 198–218

    • Fiscal Responsibility and Budget Management Law, 7–8, 199, 205–14, 216

    Indonesia

    • budget-balance rule, 3, 11n10, 131

    • capital account crisis, 68, 75

    • moral hazard, 74

    • policy guideline, 4

    inflation

    • bias, 16–17

    • Brazil, 120, 127

    • debt servicing, 48

    • European Central Bank, 156

    • India, 201, 202

    • Latin America, 106

    • Mexico, 140

    • structural close-to-balance rule, 158–9

    inflation-targeting, 2, 10n9

    • Brazil, 116, 127, 128

    • European Central Bank, 156, 157

    • Mexico, 131

    • Norway, 174

    informal rules, 9

    information

    • asymmetric, 18, 56, 57, 58, 66, 67

    • budgeting principles, 82

    • incomplete, 24

    • transparency, 213

    innovations

    • budget, 6, 91–2

    • institutional, 81, 92–3, 119–25

    instability see volatility

    institutional infrastructure, xiii, 75, 77, 80n37

    institutionalism, 86, 90

    institutions, 85–90, 115

    • fiscal outcomes, 81, 82, 90

    • innovations, 81, 92–3, 119–25

    • institution-building, 9

    • international financial, 64

    • self-enforcement, 185

    • weak, 107

    integration

    • European, 27, 29n9, 111

    • Mercosur, 109

    • see also convergence

    interest rate

    • Brazil, 114, 120, 125, 126, 128

    • capital account crises, 69

    • debt servicing, 32, 34, 43–4, 48, 50, 73

    • Economic and Monetary Union, 98, 103

    • fiscal risk, 34, 35, 36

    • India, 199, 201–2, 205, 209, 212, 213

    • Latin America, 106

    • Mexico, 139–40

    • shocks, 45, 46, 47, 106

    • structural close-to-balance rule, 158–9

    • volatility, 39, 41–2, 44, 47–8, 52n12

    intergenerational equity, 168, 175

    intergovernmental relations, 192, 193, 194, 195

    intergovernmental transfers, 8, 10, 59, 61, 63–4, 76, 235–49

    international financial institutions (IFIs), 64

    International Monetary Fund (IMF)

    • capital account crises, 70

    • cyclical adjustments, 49

    • fiscal rules, xii

    • Norway, 179n19

    • structural balance framework, 63, 64

    • structural close-to-balance rule, 160

    • transparency, 75

    investment

    • “compensated” golden rule, 227, 230

    • deficit limit, 156

    • EMU fiscal rules, 223

    • EU accession countries, 146, 147, 151, 152, 154, 159, 163n11

    • India, 201, 202–3, 205, 212, 215

    • Mexico, 245

    • permit system, 227

    • real assets, 168

    • Venezuela, 170–1

    • volatility, 54

    • see also government expenditure

    investor sentiment, xii, 67, 69, 70, 71, 73

    Ireland, subnational expenditure, 228

    Israel, Deficit Reduction Law, 25

    Italy

    • balanced-budget rule, 131

    • debt ratio, 30

    • decentralization, 220, 227, 228, 229, 231, 232

    • subnational expenditure, 228–9

    Japan

    • balanced-budget rule, 131

    • budget restructuring, 88

    • debt ratio, 30

    Jordan, debt ratio, 30

    Keynesian effects, 100

    Korea

    • banking restructuring, 74

    • capital account crisis, 68, 75

    Latin America

    • debt, 7, 40, 45–7, 48–9

    • fiscal performance, 104–7

    • fiscal rules, 1, 59–62

    • intergovernmental transfers, 235–49

    • procyclical fiscal policies, 53, 54–7, 62, 64, 106

    • stabilizing transfer rules, 8

    • tax revenue shock, 38, 45, 46, 47

    • volatility, 28, 47, 49, 53, 54–5, 104–5, 107

    LDO see Annual Budget Guidelines Law, Brazil

    legislation, xii, 4, 5, 15, 20

    • Argentina, 195, 196, 238–9

    • Brazilian Annual Budget Guidelines Law, 123, 124, 125

    • changing, 21, 25–7

    • Colombia, 241, 242

    • Indian Fiscal Responsibility and Budget Management Law, 7–8, 199, 205–14, 216

    • institutionalism, 86

    • Mexican Federal Revenue Law, 135, 136

    • penalties for law-breaking, 20–1

    • Venezuela, 174–5, 176, 177

    • see also constitutional provision; Fiscal Responsibility Law

    liability dollarization, 40, 48

    liberalization, 7, 198, 199, 201, 212

    LIF see Federal Revenue Law, Mexico

    Maastricht Treaty, 21, 27, 97, 99–101, 103, 111, 220

    • see also Economic and Monetary Union

    macroeconomic policy, 2, 9

    majoritarian regimes, 81, 87

    market access, 28, 47, 49, 50, 216, 222, 235

    maturities, 51

    MB see minimal benchmark

    medium-term budgetary frameworks (MBFs), 121, 123–4, 136, 206

    medium-term expenditure frameworks (MTEFs), 91–2

    Mercosur, 109

    Mexico, 131–45

    • banking restructuring, 74

    • budget restructuring, 88

    • budget-balance rule, 2, 3, 6–7, 11n10

    • capital account crisis, 67, 68, 69, 75, 132, 138, 243

    • constitutional provision, 4

    • cost of fiscal transition, 79n27

    • debt ratio, 30, 32, 41

    • decentralization, 4, 243

    • decline in GDP growth, 43

    • fiscal discipline, 185

    • fiscal performance, 243

    • fiscal risk, 51

    • inflation-targeting, 2

    • intergovernmental transfers, 236, 243–5, 247

    • Oil Stabilization Fund, 133, 134, 135, 137–8

    • pensions, 74

    • PRONAFIDE program, 139–41, 142, 143, 144

    • state reserve funds, 248

    minimal benchmark (MB), 149, 150

    monetary policy, 1, 48

    • Brazil, 120, 127, 130n20

    • “fear of floating”, 39

    • rules, 131

    • Stability and Growth Pact, 157

    • see also inflation-targeting

    monetary union, 27

    monitoring, 4–5, 21, 22

    • Mercosur, 109

    • Stability and Growth Pact, 102, 103

    • subnational rules, 222, 227

    • see also audit mechanisms; enforcement; surveillance

    moral hazard, 47, 74, 189

    • Brazil, 120

    • India, 212

    • intergovernmental transfers, 242, 244

    MTEFs see medium-term expenditure frameworks

    multiple equilibria

    • models, 67

    • frameworks, 71

    • games, 186–8

    national fiscal council (NFC), 111

    national interest, 97, 98

    natural resources, 7, 76, 137, 164–79

    “negative-spotlight” effect, 22, 27

    net worth, 166, 167, 177

    Netherlands

    • balanced-budget rule, 131

    • investment, 223

    • political will, 87, 88, 89

    • subnational expenditure, 228

    New Zealand

    • Fiscal Responsibility Act, 4, 80n43, 116, 131

    • monitoring mechanisms, 21

    • transparency, 132

    NFC see national fiscal council

    nonrenewable resources, 7, 76, 137, 164–79

    Norway

    • nonrenewable resources, 7, 164–5, 170, 171–4, 177

    • State Petroleum Fund, 60, 170, 171–2, 173, 174

    OECD see Organization for Economic Cooperation and Development

    oil see commodity stabilization funds; nonrenewable resources

    OPEC see Organization of Petroleum Exporting Countries

    optimal currency areas, 52n17

    optimal tax smoothing, 147, 163n12

    Organization for Economic Cooperation and Development (OECD)

    • debt, 45–7, 85

    • GDP growth, 55

    • tax revenue shock, 38, 45, 46, 47

    Organization of Petroleum Exporting Countries (OPEC), 165, 170

    original sin, 38–9, 40–3, 47, 48–9, 52n12, n13, 201

    Ouro Preto, Treaty of, 109

    output gaps, 49, 50, 149, 152, 155

    Pakistan, debt ratio, 30

    Panama, debt ratio, 41

    Paraguay

    • debt-revenue ratio, 31–2

    Pareto optimality, 186, 187

    peer pressure, 107, 109, 222, 224, 227

    PEF see Federal Expenditure Budget, Mexico

    penalties, 20–1, 29n8, 58, 109

    • EU accession countries, 146

    • structural balance rule, 62

    • see also enforcement; sanctions

    pensions

    • Brazil, 115, 127, 128

    • India, 212

    • structural reform, 6, 73, 74

    • see also social security

    permanent income, 168, 173, 175

    permit system, 226–7

    Peru

    • budget-balance rule, 2, 3, 4

    • centralization, 4

    • debt ratio, 41

    • fiscal responsibility law, 59, 61

    • import gap, 44, 45

    • inflation-targeting, 2

    • procyclical fiscal policy, 63

    • quantitative targets, 132

    • taxation, 79n30

    Philippines, capital account crisis, 68

    Poland

    • constitutional provision, 4

    • debt rule, 3, 4

    • decentralization, 4

    • fiscal indicators, 150, 151, 152, 160, 161

    • inflation-targeting, 2

    • uniform import surcharge, 80n32

    policy guidelines, 4, 9, 62

    policy signaling, 5–6, 24–5, 71, 76, 80n39, 166

    political economy perspective, 2, 15–29, 103, 111

    political issues

    • Argentina, 193, 194

    • cooperation, 191, 192

    • deficit bias, 17–19, 60, 62

    • political will, 6, 8, 25, 77, 81–94

    • procyclical fiscal policy, 57

    • reputation, 24

    • subnational rules, 183–4, 189

    Portugal

    • budget deficit, 112n7

    • fiscal adjustment, 100–1

    poverty, 54, 55–6, 171, 205, 212, 215

    prices

    • stability, 98, 131, 216

    • volatility of commodity prices, 165, 166, 167

    primary balance, 9, 48, 49–50, 100

    • Brazil, 123, 124, 128

    • India, 200

    • Mexico, 134

    • structural balance rule, 137

    • see also budget

    primary surplus, 49–50, 55, 69

    • Brazil, 49, 65n13, 76, 79n21, 114, 116, 118–19, 121, 124–7

    • Latin America, 107–8

    principal-agent problems, 189

    privatization, 75, 80n33

    • Argentina, 238

    • Brazil, 122

    • Mexico, 132

    procyclical fiscal policy, 6, 28, 47, 48, 64, 106–7

    • Argentina, 238

    • booms, 59

    • capital flight, 70

    • causes of, 56–7

    • credibility problems, 63

    • cyclical safety margin, 150

    • deficit limit, 155, 156

    • discretion, 76

    • effects of, 54–6

    • EMU fiscal rules, 223

    • EU accession countries, 7, 147, 151–4, 159–60

    • Europe, 97

    • fiscal responsibility laws, 61

    • Mexico, 243

    • resource-abundant countries, 164, 166

    • subnational rules, 225

    • volatility, 5, 53, 54, 55, 62

    PRONAFIDE program, 139–41, 142, 143, 144

    public sector borrowing requirement (PSBR)

    • Brazil, 116

    • calculation of, 145n26

    • liabilities, 145n17

    • Mexico, 132, 133, 134–5, 137–8, 139–42, 144

    public sector liabilities, 73, 75, 77, 116–17, 120

    public services, 93

    public spending see government expenditure

    “quasi-stabilizers”, 108

    rainy-day funds, 222, 224, 225, 231, 233n15, 236, 245

    recession

    • Argentina, 237, 238, 239

    • countercyclical expansion, 5

    • debt service, 48

    • EMU deficit limit, 220

    • Latin America, 110

    • poverty, 56

    • procyclical fiscal policy, 55, 154

    • Stability and Growth Pact, 102

    • stabilizing transfers, 237, 247

    • structural close-to-balance rule, 157

    • structural deficit indicator, 150

    • see also downturns

    reindustrialization, 166, 167

    reputation

    • fiscal discipline, 15, 16, 24–5

    • game theoretic approach, 188

    • noncompliance, 5

    • policy signaling, 76

    resources, 7, 76, 137, 164–79

    • see also commodity stabilization funds

    revenue see taxation

    risk

    • cash flow, 166, 167

    • debt, 5, 34, 48, 49, 50–1, 107

    • fiscal, 34–8, 47, 50–1

    • interest rate, 48, 203

    • net worth, 166, 167, 177

    • oil wealth, 173, 175, 177

    • original sin, 40

    • permit market, 226

    • political, 168

    • sharing, 248

    • spreading, 168

    • stabilizing transfers, 237

    Romania, fiscal indicators, 150, 151, 152, 160, 162

    rules see fiscal rules

    Russia

    • capital account crisis, 67, 68, 69, 75, 120, 155

    • expenditure control, 72

    sanctions, 5, 21

    • Brazilian fiscal rules, 122, 124

    • EMU rules, 97, 102–3, 221, 224–5

    • fiscal responsibility laws, 110–11

    • subnational rules, 222, 223, 230, 232

    • see also enforcement; penalties

    savings, 175, 203

    securities, 201, 203

    seignorage, 67

    self-enforcement, 185, 187–8, 214

    SGP see Stability and Growth Pact

    shocks, 9, 45–7, 50, 94, 131, 248

    • commodity prices, 60

    • EMU fiscal rules, 231

    • India, 204

    • intergovernmental transfers, 76, 240, 246

    • Latin American debt structure, 106

    • Mexican fiscal rules, 132, 135, 136, 143

    • oil, 171

    • revenue volatility, 38, 45, 46, 47

    • rule flexibility, 59

    • volatility, 55, 104

    • vulnerability to, 93

    • see also financial crises

    signaling, 5–6, 24–5, 71, 76, 80n39, 166

    Slovakia, uniform import surcharge, 80n32

    Slovenia

    • fiscal indicators, 147, 150, 151, 152, 153, 160, 162

    • growth rate stability, 163n7

    social expenditures, 56, 62

    social impact of capital account crises, 66, 72, 77

    social security, 72–3, 168

    • Brazil, 115

    • Mexico, 140, 142

    • see also benefits; pensions

    social welfare, 16, 19, 20, 170

    Spain

    • debt ratio, 30, 32

    • decentralization, 220, 227, 229, 231, 232

    • subnational expenditure, 228, 229

    spillovers, 97–8, 109, 223

    stability, xii, xiii, 1

    • Brazil, 116

    • capital account crises, 71, 72, 77

    • central government responsibility, 223

    • internal stability pacts, 228–9, 232

    • Latin America, 104

    • Norway, 173

    • output, 103–4

    • price, 98, 131, 216

    • resource-abundant countries, 177

    • stabilizing transfer rules, 8, 10, 59, 61, 63–4, 235–49

    • see also commodity stabilization funds; volatility

    Stability and Growth Pact (SGP), 6, 80n43, 97, 101–4, 116, 146

    • cyclical stabilization, 108

    • deficit limit, 220

    • EU accession countries, 155

    • Germany, 90

    • medium-term equilibrium, 53

    • sanctions, 21

    • structural close-to-balance rule, 157

    • structural deficit adjustment, 156

    • subnational governments, 225, 227, 228, 230, 231

    • see also Economic and Monetary Union; European Union

    stabilizers, 9, 48, 53, 57–8, 61, 63

    • balanced-budget rule, 76

    • capital account crises, 70

    • EMU stabilization, 221

    • EU accession countries, 147

    • Latin America, 108

    • Mexico, 135, 144

    • positive effects, 154

    • rule design, 59

    • Stability and Growth Pact, 102, 108, 220

    • structural balance rule, 137

    • structural deficit indicator, 150

    state enterprises, 75, 93, 120

    structural balance rule, 64

    • Chile, 4, 62, 63, 137, 145n16

    • ex ante close-to-balance rule, 156–8, 159, 160

    • Mexico, 137–9, 144

    subnational government debt

    • Argentina, 7, 239, 240, 246

    • Brazil, 119–20, 121–2, 123, 128

    • Colombia, 240, 242–3, 246

    • India, 206, 209, 213

    • Mexico, 133, 134, 143, 243, 244–5

    • see also decentralization

    subnational rules, 4, 5, 131, 216

    • Argentina, 7, 192–6

    • Brazil, 215

    • European Union, 8, 219–34

    • game theoretic approach, 7, 183–97

    • intergovernmental transfers, 8, 10, 59, 61, 63, 64, 235–49

    • see also decentralization; federalism

    supplementals, 86

    surveillance

    • Europe, 101, 102, 103

    • Latin America, 107, 109, 110, 111

    • see also monitoring

    sustainability, xiii, 1, 53, 62

    • debt, 76, 77, 160

      • Brazil, 6, 114–16, 119, 125–8

      • definition, 145n19

      • India, 208–13

      • Mexico, 137, 139–41, 142, 144

    • definition, 80n38

    • EMU fiscal rules, 220

    • endowment funds, 169

    • exchange rate stability, 78n9

    • India, 199, 208–13, 215, 216

    • policy signaling, 76

    • quality of adjustment, 71

    • resource-abundant countries, 177

    • Stability and Growth Pact, 102, 103

    • Venezuela, 176, 177

    Sweden

    • cyclical component of balance, 149

    • subnational expenditure, 228

    Switzerland, balanced-budget rule, 131

    targets, 29n9, 91–2, 98, 99, 115, 132

    • Brazil, 124

    • changing the law, 27

    • creative accounting, 22

    • decentralized governments, 224, 230

    • fiscal responsibility laws, 111

    • India, 207–8

    • Latin America, 110, 111

    • Mexico, 141

    • Stability and Growth Pact, 102

    • see also fiscal rules

    tax smoothing, 147, 154, 163n12

    taxation

    • Argentina, 195, 238, 239

    • Brazil, 6, 115, 127, 128

    • Colombia, 241

    • debt-tax ratio, 30–2, 37–8, 47

    • distortionary, 19, 70

    • Ecuador, 79n23, n31

    • financial transactions, 74, 239

    • India, 200–1, 204, 214

    • Latin America, 79n30, 106

    • Mexico, 132, 133, 138, 243, 244, 247

    • Norway, 170

    • progressive income tax, 70

    • quality of fiscal adjustment, 71, 72

    • reduction in revenue, 101

    • resources, 167

    • revenue volatility shock, 38, 45, 46, 47

    • structural close-to-balance rule, 158

    • subnational rules, 189, 193, 223–4, 225, 227, 229, 230, 231

    • weak administrative capacity, 73

    terms of trade, 9, 50, 204

    • budget balance adjustments, 108

    • Latin America, 28

    • primary balance, 49

    • volatility, 37, 38

    Thailand

    • banking restructuring, 74

    • capital account crisis, 68, 75

    • fiscal impulse, 78n13

    time inconsistency, 16–17, 20, 57, 76

    trade

    • India, 201, 203–4, 212

    • see also terms of trade

    transaction costs, 189

    transparency, xiii, 9, 131–2

    • Brazil, 121, 123

    • budgeting principles, 82

    • commodity stabilization funds, 169, 178

    • compliance, 23

    • creative accounting, 22

    • credibility, 4, 75, 77

    • fiscal responsibility laws, 110–11

    • India, 205, 207, 213, 214, 215

    • Mexico, 134

    • procedural rules, 15

    • signaling, 6

    • stability pacts, 232

    • subnational accounting practices, 232

    • Venezuelan savings norm, 175

    • see also accountability

    trust funds, 90

    Turkey

    • capital account crisis, 67, 68, 69, 70, 75

    • debt ratio, 30

    • fiscal consolidation, 78n18

    • fiscal impulse, 78n13

    UK see United Kingdom

    uncertainty

    • Mexican fiscal rules, 131, 135

    • resource earnings, 166, 167, 168, 173, 177

    • see also volatility

    unemployment

    • compensation scheme, 70

    • elasticity of, 148–9

    • inflation bias, 17

    • local, 235

    • Norway, 173

    unemployment benefits, 148, 149, 150, 158

    uniform import surcharge, 74–5, 80n32

    United Kingdom (UK)

    • budget restructuring, 88

    • debt ratio, 30

    • expenditure rule, 147

    • monitoring mechanisms, 21

    • structural close-to-balance rule, 158, 160

    • subnational expenditure, 228

    • transparency, 132

    United States (US)

    • budget-balance rule, 131

    • debt ratio, 30, 32, 40

    • deficit restrictions, 98

    • golden rule, 20

    • Gramm–Rudman-Hollings Deficit Reduction Act, 21–2, 25, 27

    • import gap, 44, 45

    • subnational rules, 184–5

    • transfers, 249n14

    Uruguay

    • consumption cycle, 108

    • debt ratio, 42

    US see United States

    Venezuela

    • budget-balance rule, 2, 3, 4

    • countercyclical fiscal policy, 56

    • debt ratio, 42

    • domestic currency debt, 43

    • nonrenewable resources, 165, 170–1, 174–7

    • oil price, 108

    • oil stabilization fund, 7, 59, 60, 165, 174–7

    • taxation, 79n30

    volatility, xii, 1, 5, 6, 9

    • commodity prices, 165, 166, 167

    • debt, 32–4, 35–7, 38, 39–40

    • EU accession countries, 7, 147, 148, 151, 152, 155

    • euro area, 105

    • exchange rate, 39, 40, 41–2, 47, 52n12

    • interest rate, 39, 41–2, 44, 47–8, 52n12

    • Latin America, 28, 47, 49, 53, 104–5, 107

    • Mexico, 132–3, 135, 137

    • output, 7, 147, 148, 149, 151, 152, 155

    • reduction of macroeconomic, 53–65

    • resource earnings, 169, 174

    • revenue, 38, 45, 46, 47

    • see also stability; uncertainty

    “Wagner’s Law”, 93

    welfare maximization, 16–17

    zero PSBR rule, 139, 140, 141, 143

    zero-based budgeting, 26, 84

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