Medium-Term Budgetary Frameworks Fiscal Rules and Fiscal Councils

This course, presented by the IMF’s Fiscal Affairs Department, examines the role that strong fiscal institutions and fiscal governance can play in ensuring fiscal sustainability, by drawing on international country experiences. It focuses on three main areas: medium-term budgetary frameworks, fiscal rules, and fiscal councils. 

The course will discuss the channels through which a medium-term perspective in budgeting can improve fiscal discipline and expenditure control, and surveys the preconditions for the framework to deliver intended results. The course also discusses the main elements of a medium-term budget framework and the relationship with fiscal rules. In particular, the course includes the following main elements: 

• different types of fiscal rules and their properties; 

• specific design features (e.g., choice of the target variable, escape clauses, automatic correction mechanism, timing, coordination issues arising between central and subnational governments); and 

• a special focus on structural budget balance rules, such as those requested by the EU Fiscal Compact (calculation, implementation). In addition, the course explores the possible role of non-partisan agencies in strengthening fiscal performance by raising public awareness and accountability while leaving scope for policy flexibility. 

Course Objectives: Upon completion of this course, participants should be able to: 

• Describe and explain the MTBF, Fiscal Rules, and Fiscal Councils and their role in promoting sound fiscal policy through international experiences. 

• Analyze the readiness of countries for MTBF, Fiscal Rules, and Fiscal Councils as well as to address implementation challenges. 

• Apply acquired knowledge and skills to group-based assessments of real case studies.