Independent Fiscal Institutions as a Tool of Fiscal Governance

Abstract

The recent economic crisis, one of the symptoms of which is a sudden increase of public debt in the majority of OECD countries, again made the government and the society aware of the necessity for conducting transparent, but also responsible fiscal policy. Creating a framework of the fiscal discipline responsible fiscal policy started to be perceived as an essential condition of effective governance leading to reduce budget deficit and public debt. The independent fiscal institutions may be included into regulations supporting public finance management. Their fundamental aim is to reduce the related risk of conducting the irresponsible fiscal policy, monitoring it, controlling deficit and assessing long-term effects of government action in this area. The purpose of this article is to present independent fiscal institutions and evaluate their usefulness in enhancing the effectiveness of the fiscal policy and stabilizing public finance. Experiences of the EU and OECD countries were used in the analysis.