Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future
The Croatian Parliament enacted the Fiscal Responsibility Law (FRL) in November 2010. The law is designed to ensure long-term fiscal sustainability, fiscal discipline, and transparency, which have so far not been successfully enforced in previous l...
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| Format: | Policy Note |
| Language: | English |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2011/07/16406447/fiscal-responsibility-framework-croatia-lessons-past-rules-future http://hdl.handle.net/10986/12895 |
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okr-10986-12895 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ACCOUNTING STANDARDS AGGREGATE DEMAND AMORTIZATION BENEFICIARIES BORROWING BUDGET BALANCE BUDGET BALANCES BUDGET EXECUTION BUDGET LAW BUDGET PROCESS BUDGETARY FRAMEWORK BUDGETARY FRAMEWORKS BUDGETARY PRACTICE BUDGETARY PROCESS BUDGETING BUSINESS CYCLE BUSINESS CYCLES CAPITAL SPENDING COLLATERAL COMMON POOL PROBLEM CREDIBILITY CURRENCY CURRENCY CRISES DEBT DEBT RATIO DEBT SUSTAINABILITY DEFICIT BIAS DEFICIT TARGET DISCLOSURE OF INFORMATION DISCRETIONARY MEASURES ECONOMIC DEVELOPMENTS ECONOMIC RECOVERY ECONOMIC SHOCKS EMERGING MARKET EMERGING MARKET ECONOMIES ENFORCEMENT MECHANISM ENFORCEMENT MECHANISMS EQUALIZATION EXPENDITURE EXPENDITURE GROWTH EXPENDITURES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FISCAL ADJUSTMENT FISCAL ASSUMPTIONS FISCAL AUTHORITIES FISCAL BALANCE FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL DEFICIT REDUCTION FISCAL DEFICITS FISCAL DISCIPLINE FISCAL FRAMEWORK FISCAL IMPACT FISCAL INFORMATION FISCAL INSTITUTIONS FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL PLANS FISCAL POLICIES FISCAL POLICY FISCAL POLICY RULES FISCAL PROBLEMS FISCAL REPORTING FISCAL RESPONSIBILITY FISCAL RESPONSIBILITY FRAMEWORKS FISCAL RISKS FISCAL RULE FISCAL RULES FISCAL STANCE FISCAL STRATEGY FISCAL SUSTAINABILITY FISCAL TARGETS FISCAL TRANSPARENCY GOVERNMENT BALANCE GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUES GOVERNMENT SPENDING INCOME TAX INFLATION INFORMATION SYSTEMS INSTRUMENT INTEREST PAYMENTS INTERNAL AUDIT INTERNATIONAL MONETARY FUND INVESTOR CONFIDENCE JUDGE LEVEL OF DEBT LONG-TERM DEBT MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MANDATES MEDIUM-TERM EXPENDITURE FRAMEWORKS MONETARY FUND MONETARY UNION MUNICIPALITIES NOMINAL DEFICIT PENALTY POLICY CREDIBILITY POLITICAL ECONOMY PRIMARY BALANCE PRIMARY DEFICIT PRIVATE SECTOR PUBLIC PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC DEFICITS PUBLIC ENTERPRISES PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCES PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SECTOR ACCOUNTING PUBLIC SPENDING REAL GROWTH REPAYMENT RESTRICTIVE FISCAL POLICY STOCKS SUBNATIONAL GOVERNMENTS TAX TAX RATES TAX REVENUES TAXATION TRANSITION ECONOMIES TRANSPARENCY TRANSPARENCY CODE TREASURY WAGES |
| spellingShingle |
ACCOUNTING ACCOUNTING STANDARDS AGGREGATE DEMAND AMORTIZATION BENEFICIARIES BORROWING BUDGET BALANCE BUDGET BALANCES BUDGET EXECUTION BUDGET LAW BUDGET PROCESS BUDGETARY FRAMEWORK BUDGETARY FRAMEWORKS BUDGETARY PRACTICE BUDGETARY PROCESS BUDGETING BUSINESS CYCLE BUSINESS CYCLES CAPITAL SPENDING COLLATERAL COMMON POOL PROBLEM CREDIBILITY CURRENCY CURRENCY CRISES DEBT DEBT RATIO DEBT SUSTAINABILITY DEFICIT BIAS DEFICIT TARGET DISCLOSURE OF INFORMATION DISCRETIONARY MEASURES ECONOMIC DEVELOPMENTS ECONOMIC RECOVERY ECONOMIC SHOCKS EMERGING MARKET EMERGING MARKET ECONOMIES ENFORCEMENT MECHANISM ENFORCEMENT MECHANISMS EQUALIZATION EXPENDITURE EXPENDITURE GROWTH EXPENDITURES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FISCAL ADJUSTMENT FISCAL ASSUMPTIONS FISCAL AUTHORITIES FISCAL BALANCE FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL DEFICIT REDUCTION FISCAL DEFICITS FISCAL DISCIPLINE FISCAL FRAMEWORK FISCAL IMPACT FISCAL INFORMATION FISCAL INSTITUTIONS FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL PLANS FISCAL POLICIES FISCAL POLICY FISCAL POLICY RULES FISCAL PROBLEMS FISCAL REPORTING FISCAL RESPONSIBILITY FISCAL RESPONSIBILITY FRAMEWORKS FISCAL RISKS FISCAL RULE FISCAL RULES FISCAL STANCE FISCAL STRATEGY FISCAL SUSTAINABILITY FISCAL TARGETS FISCAL TRANSPARENCY GOVERNMENT BALANCE GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUES GOVERNMENT SPENDING INCOME TAX INFLATION INFORMATION SYSTEMS INSTRUMENT INTEREST PAYMENTS INTERNAL AUDIT INTERNATIONAL MONETARY FUND INVESTOR CONFIDENCE JUDGE LEVEL OF DEBT LONG-TERM DEBT MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MANDATES MEDIUM-TERM EXPENDITURE FRAMEWORKS MONETARY FUND MONETARY UNION MUNICIPALITIES NOMINAL DEFICIT PENALTY POLICY CREDIBILITY POLITICAL ECONOMY PRIMARY BALANCE PRIMARY DEFICIT PRIVATE SECTOR PUBLIC PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC DEFICITS PUBLIC ENTERPRISES PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCES PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SECTOR ACCOUNTING PUBLIC SPENDING REAL GROWTH REPAYMENT RESTRICTIVE FISCAL POLICY STOCKS SUBNATIONAL GOVERNMENTS TAX TAX RATES TAX REVENUES TAXATION TRANSITION ECONOMIES TRANSPARENCY TRANSPARENCY CODE TREASURY WAGES World Bank Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future |
| geographic_facet |
Europe and Central Asia Croatia |
| description |
The Croatian Parliament enacted the
Fiscal Responsibility Law (FRL) in November 2010. The law is
designed to ensure long-term fiscal sustainability, fiscal
discipline, and transparency, which have so far not been
successfully enforced in previous legislation. The purpose
of this note is to (i) review efforts to enhance fiscal
management and stability in Croatia; (ii) present relevant
international experience; and (iii) make recommendations for
improving the FRL. The key recommendations stemming from the
review of the law are the following: a) the temporary fiscal
rule that the authorities plan first is appropriate. It
calls for expenditure-based consolidation with clear annual
spending reduction targets because revenue generation cannot
be counted on to balance the budget over the medium term.
The rule should be in place until the general government
balance is reached because it would help reduce the
debt-to-GDP ratio; b) setting up a legally and effectively
independent authority to transparently monitor compliance
with all elements of the fiscal responsibility framework,
especially the fiscal rule, the three-year budget plan, and
fiscal forecasts, is highly recommended; c) if the fiscal
rule is to be effective, it should be supported by
meaningful and enforceable sanctions; and d) also, the FRL
should bind not only the current government and parliament
but also future ones. Thus, as some other countries have
done, the authorities could have considered enacting the FRL
as an organic law with a two-thirds majority. |
| format |
Economic & Sector Work :: Policy Note |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future |
| title_short |
Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future |
| title_full |
Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future |
| title_fullStr |
Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future |
| title_full_unstemmed |
Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future |
| title_sort |
fiscal responsibility framework in croatia : lessons from the past, rules for the future |
| publisher |
Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2011/07/16406447/fiscal-responsibility-framework-croatia-lessons-past-rules-future http://hdl.handle.net/10986/12895 |
| _version_ |
1764421014558605312 |
| spelling |
okr-10986-128952021-04-23T14:03:03Z Fiscal Responsibility Framework in Croatia : Lessons from the Past, Rules for the Future World Bank ACCOUNTING ACCOUNTING STANDARDS AGGREGATE DEMAND AMORTIZATION BENEFICIARIES BORROWING BUDGET BALANCE BUDGET BALANCES BUDGET EXECUTION BUDGET LAW BUDGET PROCESS BUDGETARY FRAMEWORK BUDGETARY FRAMEWORKS BUDGETARY PRACTICE BUDGETARY PROCESS BUDGETING BUSINESS CYCLE BUSINESS CYCLES CAPITAL SPENDING COLLATERAL COMMON POOL PROBLEM CREDIBILITY CURRENCY CURRENCY CRISES DEBT DEBT RATIO DEBT SUSTAINABILITY DEFICIT BIAS DEFICIT TARGET DISCLOSURE OF INFORMATION DISCRETIONARY MEASURES ECONOMIC DEVELOPMENTS ECONOMIC RECOVERY ECONOMIC SHOCKS EMERGING MARKET EMERGING MARKET ECONOMIES ENFORCEMENT MECHANISM ENFORCEMENT MECHANISMS EQUALIZATION EXPENDITURE EXPENDITURE GROWTH EXPENDITURES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FISCAL ADJUSTMENT FISCAL ASSUMPTIONS FISCAL AUTHORITIES FISCAL BALANCE FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL DEFICIT REDUCTION FISCAL DEFICITS FISCAL DISCIPLINE FISCAL FRAMEWORK FISCAL IMPACT FISCAL INFORMATION FISCAL INSTITUTIONS FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL PLANS FISCAL POLICIES FISCAL POLICY FISCAL POLICY RULES FISCAL PROBLEMS FISCAL REPORTING FISCAL RESPONSIBILITY FISCAL RESPONSIBILITY FRAMEWORKS FISCAL RISKS FISCAL RULE FISCAL RULES FISCAL STANCE FISCAL STRATEGY FISCAL SUSTAINABILITY FISCAL TARGETS FISCAL TRANSPARENCY GOVERNMENT BALANCE GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUES GOVERNMENT SPENDING INCOME TAX INFLATION INFORMATION SYSTEMS INSTRUMENT INTEREST PAYMENTS INTERNAL AUDIT INTERNATIONAL MONETARY FUND INVESTOR CONFIDENCE JUDGE LEVEL OF DEBT LONG-TERM DEBT MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MANDATES MEDIUM-TERM EXPENDITURE FRAMEWORKS MONETARY FUND MONETARY UNION MUNICIPALITIES NOMINAL DEFICIT PENALTY POLICY CREDIBILITY POLITICAL ECONOMY PRIMARY BALANCE PRIMARY DEFICIT PRIVATE SECTOR PUBLIC PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC DEFICITS PUBLIC ENTERPRISES PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCES PUBLIC INVESTMENT PUBLIC SECTOR PUBLIC SECTOR ACCOUNTING PUBLIC SPENDING REAL GROWTH REPAYMENT RESTRICTIVE FISCAL POLICY STOCKS SUBNATIONAL GOVERNMENTS TAX TAX RATES TAX REVENUES TAXATION TRANSITION ECONOMIES TRANSPARENCY TRANSPARENCY CODE TREASURY WAGES The Croatian Parliament enacted the Fiscal Responsibility Law (FRL) in November 2010. The law is designed to ensure long-term fiscal sustainability, fiscal discipline, and transparency, which have so far not been successfully enforced in previous legislation. The purpose of this note is to (i) review efforts to enhance fiscal management and stability in Croatia; (ii) present relevant international experience; and (iii) make recommendations for improving the FRL. The key recommendations stemming from the review of the law are the following: a) the temporary fiscal rule that the authorities plan first is appropriate. It calls for expenditure-based consolidation with clear annual spending reduction targets because revenue generation cannot be counted on to balance the budget over the medium term. The rule should be in place until the general government balance is reached because it would help reduce the debt-to-GDP ratio; b) setting up a legally and effectively independent authority to transparently monitor compliance with all elements of the fiscal responsibility framework, especially the fiscal rule, the three-year budget plan, and fiscal forecasts, is highly recommended; c) if the fiscal rule is to be effective, it should be supported by meaningful and enforceable sanctions; and d) also, the FRL should bind not only the current government and parliament but also future ones. Thus, as some other countries have done, the authorities could have considered enacting the FRL as an organic law with a two-thirds majority. 2013-03-25T16:19:20Z 2013-03-25T16:19:20Z 2011-07 http://documents.worldbank.org/curated/en/2011/07/16406447/fiscal-responsibility-framework-croatia-lessons-past-rules-future http://hdl.handle.net/10986/12895 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Economic & Sector Work :: Policy Note Economic & Sector Work Europe and Central Asia Croatia |