Discussion paper

DP3238 Fiscal Policy: Institutions versus Rules

The Paper explores how fiscal policy can be made both more disciplined and more counter-cyclical. It first examines whether the decline of public debts observed in the OECD area during the 1990s can be explained either by less activism or by a priority towards consolidation. It then argues that rules, for example the Stability and Growth Pact, are less likely to deliver the desired outcome than institutions. Drawing a parallel with monetary policy, it examines how a Fiscal Policy Committee could reproduce what Monetary Policy Committees have achieved in central banking.


Wyplosz, C (2002), ‘DP3238 Fiscal Policy: Institutions versus Rules‘, CEPR Discussion Paper No. 3238. CEPR Press, Paris & London. https://cepr.org/publications/dp3238