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International Examples

Austria

The Government Debt Committee was established in 2002, comprises 14 members, and receives financial support from the Austrian Central bank. It provides recommendations on the direction of fiscal policy, and the overall fiscal stance.

Australia

Following the recommendations Joint Select Committee (see here), a Parliamentary Budget Office is to be established in 2012. The focus is on project costing, but the office may also decide to comment on macroeconomic budgetary issues. Mr Phil Bowen has been appointed as the inaugural Parliamentary Budget Officer.

Belgium

The Federal Planning Bureau, established in 1994, provides a range of services along similar lines to the CPB in the Netherlands. In addition, the High Council of Finance, which was reformed in 1989, overseas the coordination of regional and national fiscal policy. It sets medium term objectives for regional and national budget deficits, and proposes annual targets, which form the basis for government negotiations. The High Council is chaired by the Minister of Finance, but has representatives from inside and outside government. Although it has no formal decision making power, it does exert considerable influence. The influence of the High Council is analysed in Coene (2010).

Canada

The Parliamentary Budget Office provides independent analysis to Parliament on the state of the nation's finances, the government's estimates and trends in the Canadian economy, and upon request estimates of the financial cost of any specific proposals. It has a staff of 14.

Denmark

The Economic Council, established in 1962, prepares economic reports and forecasts on a range of issues including fiscal policy. It has four members and a staff of around 35.

Germany

The German Council of Economic Experts comprises five members and a staff of around 30. The Council was established in 1963 to advise on a wide variety of economic policy issues, including macroeconomic fiscal policy. The federal government has to publish its comments on the Council’s annual report.

Hungary

The Fiscal Council of the Republic of Hungary was set up in 2009 as ‘an independent state institution that endeavours to ensure the responsible management of public resources.’ It prepared macroeconomic forecasts which represented the baseline for budgetary decisions. It also provided comment and advice on fiscal planning more generally, within the context of existing fiscal rules, with a total staff of around 35. Some of its reports were critical of government proposals or forecasts. In early 2011 the Hungarian government replaced the Council with a three person body that was widely perceived as a less effective fiscal policy watchdog (see, for example, a letter to the Financial Times ($) from three directors of other fiscal councils).

Ireland

After plans outlined here, the members of the Irish Fiscal Advisory Council were announced in June 2011. The Council reports formally at least 3 times per year. It has five members, and a secretariat of three.

Netherlands

The Netherlands Bureau for Economic Policy Analysis (often referred to as the CPB, for Central Planning Bureau) was founded in 1945. It is an independent research institute and has its own independent external advisory body. It provides economic and fiscal forecasts as inputs into the budgetary planning process. It also evaluates (at the party’s request) the election programme of government and opposition parties. The Bureau also provides economic expertise over a wide range of specific issues, such as labour market reform, and has a staff of over 110.

Portugal

The Portuguese Public Finance Council (Conselho das Finanças Públicas, CFP) was created in 2011. The CFP was created by the 5th amendment to the Budget Framework Law in May 2011. The members of the board were appointed in December 2011, and took office in mid February 2012. Its mission is to undertake an independent assessment of the consistency, compliance and sustainability of fiscal policy and to enhance, through increased transparency, the quality of democracy and economic policy decision-making and to reinforce the financial credibility of the State. The Council will present reports on: the Stability Programme and other procedures within the European regulatory framework of the Stability and Growth Pact; the multi-annual framework of budgetary planning; the draft State budget; the sustainability of the public finances; as well as on other subjects it considers relevant.

Slovakia

On 27th June 2012 the Slovak Parliament elected the three members of the newly created Council for Budget Responsibility by constitutional majority: Ivan Sramko (chair), Michal Horvath and Ludovit Odor. An early discussion is contained in a paper by Horvath and Odor.

Slovenia

The Public Finance Act of 2009 requires the creation of an independent advisory body to provide assessments of the public finances.

South Korea

The National Assembly Budget office (NABO) was established to support the legislative activity of the National Assembly of Korea in 2003. Its aim is to be a ‘fiscal institution that assists in the examination of the national budget and accounts in the legislative body via impartial and non-partisan research and analysis’. It currently employs around 120 staff. It has a wide ranging remit, and provides analysis of particular micro and macro issues as well as macroeconomic trends.

Sweden

In 2007 the Swedish Fiscal Council was established. The Council consists of eight members and is assisted by a secretariat with four employees. The mission of the Council is to provide an independent evaluation of the Swedish Government´s fiscal policy. Its first director, Lars Calmfors, has a paper describing the initial experience of the council. The current director is Lars Jonung.

United Kingdom

In 2008 the Conservative Party outlined its proposal for an Office of Budget Responsibility. Some comments on the original UK proposal are here, and in Chapter 11 of the Institute of Fiscal Studies’ Green Budget. The case for a UK Fiscal Council is presented in written form in Kirsanova et al (2007), in Power Point or, to my embarrassment, video form here, and as a dialog between Tim Besley and Romesh Vaitilingam here (see also Besley and Scott (2010)). The new (May 2010) Conservative/Liberal government, as one of its first acts, set up an interim Office for Budget Responsibility (OBR), chaired on an interim basis by Sir Alan Budd. Within weeks it produced its first pre-budget report, and shortly afterwards it produced the forecasts that were part of an ‘emergency’ Budget. In July 2010 a debate began on the structure of the permanent OBR. The Treasury Select Committee have taken evidence on this issue (its report is here - note that their international evidence is taken from this webpage), and Lars Calmfors, director of the Swedish Fiscal Council, has also made an interesting contribution. Legislation establishing the permanent OBR has recently been approved by parliament. Sir Alan Budd was replaced by Robert Chote, and the OBR has already produced a number of reports. An account of its formation and structure is given in Wren-Lewis, 2011b. When the OBR revised down its estimate of potential output in November 2011, the Chancellor revised his medium term fiscal plans as a result (see here)

United States

The Congressional Budget Office (CBO) has a mandate to provide the United States Congress with ‘objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget and information and estimates required for the Congressional budget process.’ Established in 1974, it provides objective and impartial assessments (‘scoring’) of policy proposals that have a significant influence on decision making. It also provides an overall assessment of the likely path of deficits and debt into the medium term. It has a staff of around 250. It produces an annual assessment of the outlook for the government budget, including projections that go to 2080.

Other institutions

The European commission also has a survey of all independent and quasi-independent institutions involved is fiscal policy in the EU countries.
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