Academic Scientific JournalsFiscal Rules and Fiscal Illusions – The Experience of Poland
Keywords:
deficit bias, public debt, fiscal sustainability, fiscal rules, fiscal illusionsAbstract
The aim of this article is to provide the synthetic presentation of over twenty years of Poland’s experience in establishing and obeying the system of fiscal rules. This experience depicts the scale of problems entailed by public authorities’ low determination as regards observance of constraints imposed on them. Therefore, it is necessary to substantially reinforce the budgetary frameworks in Poland with the use of the best European models. Firstly, the ESA 2010 standards should be fully implemented into the Polish legal order. Secondly, the Polish system of fiscal rules should be complemented with the budget balance rule, which would make it easier to achieve and maintain a medium-term budgetary objective defined by the EU regulations. Thirdly, a fiscal institution should be established, which would allow for constant and independent of the government monitoring of the observance of fiscal rules. Such institutional changes would make it possible to constrain the discretionary nature of the fiscal policy and, consequently, would increase Poland’s fiscal sustainability in the medium and long term. The basic research methods used in this paper are dogmatic analysis and comparative legal analysis.
Downloads
References
Alesina, A., Perotti, R., The Political Economy of Budget Deficits. Cambridge: NBER Working Paper 4637, 2007.
Ayuso-i-Casals J., Deroose S., Flores E., Moulin L., Introduction: The Role of Fiscal Rules and Institutions in Shaping Budgetary Outcomes. In: Ayuso-i-Casals J., Deroose S., Flores E. and Moulin L. [eds.] Policy Instruments for Sound Fiscal Policies. Fiscal Rules and Institutions. Basingstoke: Palgrave Macmillan, 2009.
Barro, R., Gordon, D. Rules, Discretion and Reputation in a Natural Rate Model of Monetary Policy. Journal of Monetary Economics vol. 12, no. 1, 1983.
Bohn, H., The Sustainability of Fiscal Policy in the United States. Santa Barbara: CESifo Working Paper 1446, 2005.
Buchanan, J.M.The Balanced Budget Amendment: Clarifying the Arguments. Public Choice vol. 90, no. 1, 1997.
Calmfors, L., Wren-Lewis, S., What should fiscal councils do? Economic Policy, vol. 26, issue 68, 2011.
Cukierman, A., Gerlach, S. The Inflation Bias Revisited: Theory and Some International Evidence. The Manchester School vol. 71, no. 5, 2003.
Debrun, X., Kinda, T., Strengthening Post-Crisis Fiscal Credibility – Fiscal Council on the Rise. A New Dataset, Washington D.C.: IMF Working Paper 14/58, 2014.
Debrun, X., Kinda, T., Curristine, T., Eyraud, L., Harris, J., Seiwald, J., The functions and impact of fiscal councils, Washington D.C.: IMF Policy Paper July 16, 2013.
Debrun, X., Kumar, M.S., The Discipline-Enhancing Role of Fiscal Institutions: Theory and Empirical Evidence, Washington D.C.: IMF Working Paper 07/171, 2007.
Debrun, X., Moulin, L., Turrini, A., Ayuso-i-Casals, J., Kumar, M.S., National fiscal rules. Economic Policy vol. 23, issue 54, 2008.
Deroose, S., Moulin, L., Wierts, P., National Expenditure Rules and Expenditure Outcomes: Evidence for EU Member States, Wirtschaftspolitische Blätter no. 1, 2006.
Heinemann, F., Moessinger M-D., Yeter M., Do Fiscal Rules Constrain Fiscal Policy? A Meta_Regression-Analysis. European Journal of Political Economy, vol. 51, 2018.
Inman, R.P., Do Balanced Budget Rules Work? U.E. Experience and Possible Lessons for the EMU. Cambridge: NBER Working Paper 5838, 1996.
Kopits, G., Fiscal Rules: Useful Policy Framework or Unnecessary Ornament Washington D.C.: IMF Working Paper 01/145, 2001.
Kopits, G., Symansky, S., Fiscal Policy Rules. Washington D.C.: IMF Occasional Paper 98/162, 1998.
Krogstrup, S., Wyplosz, C., A Common Pool Theory of Deficit Bias Correction. London: Centre for Economic Policy Research. Discussion Paper 5866, 2007.
Kydland, F., Prescott, E., Rules Rather than Discretion: The Inconsistency of Optimal Plans. Journal of Political Economy vol. 85, no. 3, 1977.
Laidler, D., Fiscal Deficits and International Monetary Institutions. London: Centre for the Study of International Economic Relations Working Paper 8526C, 1985.
Mackiewicz, M., Metody weryfikacji stabilności fiskalnej – porównanie własności [Fiscal sustainability verification methods - comparison of properties]. Bank i Kredyt [Bank and Credit] vol. 41, no. 2, 2010.
Milesi-Ferretti, G.M., Fiscal Rules and the Budget Process. Washington D.C.: IMF Working Paper 96/60, 1996.
Panfil, P., Does Poland need a fiscal institutions? Acta Universitatis Brunensis. Iuridica no. 549, 2016.
Poterba, J.M., Do Budget Rules Work? Cambridge: NBER Working Paper 5550, 1996.
Poterba, J.M., State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics. Journal of Political Economy vol. 102, no. 4, 1994.
Reinhart, C.M., Rogoff, K.S., From Financial Crash to Debt Crisis. Cambridge: NBER Working Paper 15795, 2010.
Rommerskirchen, C., Fiscal rules, fiscal outcomes and financial market behavior. European Journal of Political Research vol. 54. No. 4, 2015.
Schaechter, A., Kinda, T., Budina, N., Weber, A., Fiscal Rules in Response to the Crisis – Toward the “Next-Generation” Rules. A New Dataset. Washington D.C.: IMF Working Paper 12/187, 2012.
Sutherland, D., Price, R., Joumard, I., Fiscal Rules for Sub-Central Governments: Design and Impact. OECD Working Paper no. 1, 2006.
Wyplosz, C., Fiscal Rules: Theoretical Issues and Historical Experiences. In: A. Alesina and F. Giavazzi [eds.] Fiscal Policy after the Financial Crisis. Chicago/London: The University of Chicago Press, 2013.
Legal Acts
Treaty on the Functioning of the European Union, OJ C326.
Council Directive 2011/85/EU of 8th November 2011 on requirements for budgetary frameworks of the Member States, OJ L306.
Constitution of the Republic of Poland as of 2 April 1997 (Journal of Laws 1997, no. 78, item 483 as amended).
Council Regulation (EC) No. 1466/1997 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, OJ L209.
Act on Amending the Public Finance Act of 10th December 2015 (Journal of Laws 2015, item 2150).
Public Finance Act of 27th August 2009 (consolidated text Journal of Laws 2019, item 689 as amended).
Other Official Documents
European Commission, Fiscal Sustainability Report 2012, European Economy, no. 8, 2012.
European Commission, Fiscal rules database [2019].
Available at: https://ec.europa.eu/info/publications/fiscal-rules-database_en, accessed: 2nd November 2019.
IMF, Assessing sustainability, Washington, 2002.
IMF, Fiscal Rules – Anchoring Expectations for Sustainable Public Finances, Washington, 2009.
OECD, Government at a Glance 2013, Paris, 2013.
Downloads
Published
How to Cite
Issue
Section
License
Financial Law Review is an open access journal which means that all the articles published are freely available without charge to the reader or his/her institution.
The articles published in Financial Law Review are available under a licence Attribution-NonCommercial-NoDerivs 3.0 Unported (CC BY-NC-ND 3.0)
The Author furnishes a non-exclusive and free-of-charge license to use the his Work without territorial limitations and for an unlimited period.
Archiving policy
All texts from the journal Financial Law Review are published in electronic version. We strive to archive texts in various databases. Archival issues are also available on the platform of the Academic Scientific Journals: https://czasopisma.bg.ug.edu.pl/index.php/flr/index
Moreover articles published in the journal are archived at the Repository of the University of Gdansk.
