Who Will Guard the Guardians? The Case for Fiscal Councils (1703)
19/06/2008, CEPR, London
The idea of fiscal rules in relation to total government debt is familiar, but increasingly academic economists and international institutions are talking about the need for new fiscal institutions. Of all the proposals put forward, the most realistic from a political point of view, is what the IMF call a 'Fiscal Council' - a watchdog on the state of government finances. While the UK Treasury has so far resisted this idea, some recent reports suggest a possible change of heart.
This talk will start by putting forward the economic case for Fiscal Councils. Simon Wren-Lewis will argue that Fiscal Councils could not only be useful in exposing spendthrift politicians, but also advantageous to a more benevolent government. He then considers whether they are an alternative to fiscal rules, or whether they can complement such rules. Finally he will outline what form a UK Fiscal Council might take, and how this structure relates to similar bodies overseas.