A lively debate about the government’s fiscal policies and the state of public finances puts pressure on transparency and the credibility of budget documents. On August 1, 2007, the Swedish Government set up a Fiscal Council (Finanspolitiska rådet) to provide an independent scrutiny of fiscal policy, promote active public debate, and strengthen the credibility of fiscal policy. The case for strengthening independent review of economic forecasts and fiscal policy has received increasing attention in the past years, and the Swedish initiative may with time provide valuable insight to the effectiveness of such institutions.
The Fiscal Council will assess the clarity of budget documents, and to what extent proposed policies are consistent with the Government’s fiscal objectives. Based on the Spring Fiscal Policy Bill (essentially a pre-budget statement sent to Parliament on April 15) and the Budget Bill (submitted to Parliament on September 20), the Fiscal Council will evaluate four issues:
The Fiscal Council is also explicitly given the task of promoting a public debate on economic policies.
The Fiscal Council will complement the existing institutions involved in evaluating macroeconomic and fiscal development. These include:
The Fiscal Council is set up as an independent agency, subordinate to the Government. Its eight members—appointed by the Government for three years—will be selected from both the academic world and from the government sector. The Fiscal Council will annually present a report to the Government in mid-March, including the results of its analysis and conclusions, and dissenting views of individual Council members. Although the Council is created by the Government, there is an explicit expectation that Parliament (Riksdagen)—and particularly the Standing Committee on Finance—will take an interest in the report.
Posted by Gösta Ljungman
Rosenbad, Prime Minister's Office
Photographer: Pawel Flato