The characteristics of independent fiscal council in Germany

Abstract

The article contains a nine-parameter comparison of the Independent advisory board to the German stability council with the institutional model of the independent fiscal council (IFC) in the OECD countries. The list of parameters has been designed in accordance with the principles for independent fiscal institutions approved by OECD Council. The author found full compliance of the German IFC with the model IFC on the regulatory framework (primary legislation), number of functions (two functions, these are assessing fiscal forecasts and monitoring compliance with fiscal rule) and resources (small annual budget and staff). Partial compliance was discovered in ensuring independence/nonpartisanship and transparency. Lack of compliance was revealed in terms of relationship with legislature, access to information, communications with stakeholders and external efficiency evaluation. The presented analysis led to the conclusion that the German IFC is still a highly specialized institution focused on the goal of enhancing fiscal discipline, while the other two important goals of such organizations (promoting greater budget transparency/accountability and raising the quality of public debate on fiscal policy) are postponed for the future.

Keywords

• independent fiscal institution
• independent fiscal council
• independent advisory board to the german stability council
• strengthening fiscal discipline
• assessing fiscal forecasts