The past and future of subnational fiscal rules
An analysis of fiscal rules over time
Fiscal rules are increasingly used at state and local levels to promote fiscal sustainability
in OECD countries. Following the Global Financial Crisis, multiple reforms to fiscal
rule frameworks were made so that governments could better tackle crises and build
buffers for future downturns. This paper examines recent trends in the adoption of
fiscal rules across levels of government and empirically assesses their effects with
the purpose of providing lessons for the post-COVID-19 period. Beyond addressing the
deterioration in public finances after the pandemic, the challenges include addressing
the impact of population ageing, climate change and the energy transition, as well
as growing regional inequalities. Evolution of the rules employed at the central level
are contrasted to those at the subnational levels, including design features and institutional
elements, together with their goals and limitations.
Available from October 18, 2022
In series:OECD Working Papers on Fiscal Federalismview more titles