Fiscal councils’ impact on promoting transparency and accountability in public finance management

Bach, Sanja

doi:10.3326/pse.44.3.4.

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Fiscal councils’ impact on promoting transparency and accountability in public finance management

Sanja Bach*

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https://doi.org/10.3326/pse.44.3.4

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Questionnaire
Questionnaire

Questionnaire

1. How does your fiscal council communicate with the public?
(multiple replies possible)

web page
press releases
briefings
press conferences
social groups (YouTube, Twitter, Facebook, etc.)
interviews
PR or marketing agency
other, please specify

2. How often does your fiscal council communicate with the public?

a week
a month
quarterly
semi-annually
a year
once a year
other, please specify

3. When does your fiscal council usually communicate with the public?
(multiple replies possible)

when there are significant fiscal events (planning the state budget, presenting the draft state budget, the debate on the state budget in Parliament, the execution of the state budget)
when changes in fiscal policy are being announced
when tax-policy is out of the set framework
in the time of the release of the compliance/incompliance with fiscal rules
ahead of parliamentary elections and during the election campaign in order for the voters to be fairly informed about fiscal policy
in case of major failures in the conduction of fiscal policy
other, please specify

4. What is the average annual media coverage of the activities of your fiscal council?

more than 10 releases in the media
more than 20 releases in the media
more than 50 releases in the media
more than 100 releases in the media
more than 150 releases in the media
other, please specify

5. Which media issue the largest number of releases on the work of your fiscal council?

print media (dailies, weeklies, monthlies, etc.)
electronic media (radio, television, etc.)
digital media (social groups, Facebook, Twitter, YouTube, etc.)
online media (news portals, etc.)

Additional information

6. Which area do most of the media reports address?
(multiple replies possible)

activities of the Council
analysis, assessments and reports of the Council
criticism of the government's fiscal policy
trends in deficit and public debt
transparency and accountability in the budget process
other, please specify

7. What international media does your fiscal council use to send a message about the government's fiscal policy to the world public?
(multiple replies possible)

news agencies (Reuters, Bloomberg, etc.)
The Financial Times and the like.
The Economist and the like.
international television channels (CNN, CNBC, etc.)
they do not use any international media
other, please specify

8. How much funding was allocated from the budget of your fiscal council for marketing and public relations in 2015 and 2016? (amount in EUR)

in 2015
in 2016
no data on the funding

9. Is the monitoring of the compliance with fiscal rules publicly available?
(multiple replies possible)

on the web site of the Council
via press releases
via briefing with journalist
via press conferences
presented in the Parliament
other, please specify

10. How do you assess the media visibility of the compliance with fiscal rules?

information about this is published/broadcast in all major media, followed by a public debate
information about this is published/broadcast in all major media, no public debate
information about this is published/broadcast only in some media
there is no, or insufficient, information about this in the media
other, please specify

11. How do you assess the media visibility of noncompliance with fiscal rules?

information about this is published/broadcast in all major media, followed by a public debate
information about this is published/broadcast in all major media, no public debate
information about this is published/broadcast only in some media
there is not, or insufficient, information about this in the media
other, please specify

12. Please describe the reaction of the government in relation to the assessment of noncompliance with national fiscal rules

reacts extremely negatively to the fiscal institution
explains why it does not comply
publicly announces it is taking corrective steps
publicly explains why it does not take corrective steps
usually does not react publicly
other, please specify

13. How can IFIs contribute to the increase in the (politicians’) accountability for not complying with fiscal rules?
(multiple replies possible)

by better informing the public through the media about the importance of the compliance with the rules and the consequences of the noncompliance
by educating politicians
by educating the public
by the influence of IFIs through the media on the politicians’ reputations
other, please specify

14. How to increase the media visibility of compliance with the rules?

by more efficient communication with the public
by creating a communication strategy with the public
by earmarking the funds for marketing
by increasing the funds for marketing
by selecting individuals that have communication skills to head the institution
other, please specify

15. Please describe the reaction of the government to critical views by your fiscal council on fiscal policy published in the media?

The government generally respects the criticism, becoming more transparent and accountable.
The government generally respects the criticism, but does not become more transparent and accountable.
The government explains the reasons for the state of fiscal policy.
The government rarely appreciates criticism.
The government threatens that budgetary resources for the work of fiscal institutions will be reduced.
The government reacts extremely negatively.
The government generally does not react.
Other, please specify

16. How does your fiscal council affect the fiscal transparency and (politicians’) accountability in the budget process?
(multiple replies possible)

by promoting fiscal transparency and accountability
by analysing fiscal transparency
by supervising fiscal sustainability
by preparing public reports that have significant media impact
by promoting sound fiscal policy
other, please specify

17. What do you see as the main cause of the growth of the deficits and public debts in your countries in the period from 2008 to 2015?
(multiple replies possible)

excessive government spending in (good) times before the crisis
poor risk management before the crisis
inadequate and belated government response to the global financial crisis
fiscal irresponsibility and lack of transparency
politicians were disoriented during the crisis
absence of fiscal rules
noncompliance with fiscal rules
non-existence of independent fiscal institutions
introduction of flexible rules
susceptibility to political discretion
political misuse of state finances
bad and irresponsible policies of EU member states
increased spending before the elections and transfer of costs to the future generations
insufficient and biased information to the public about the state of public finances
there is no problem with deficit and public debt, and the public finances were stable
other, please specify

18. Does the higher media visibility of the compliance with rules and more effective communication of IFIs contribute to transparency and (politicians’) accountability in the budget process?

yes, please specify how
no, please specify reasons

19. How to increase the impact of IFIs on fiscal transparency and (politicians’) accountability in the budget process?

by strengthening the power of IFIs through changing national legislation
by strengthening the power of IFIs through changing European legislation (Stability and Growth Pact)
by more efficient communication with the public
by increasing the number of public debates on fiscal policy in the media
other, please specify

20. What are the obstacles to any increase in the impact of your fiscal council on fiscal transparency and (politicians’) accountability in the budget process?
(multiple replies possible)

insufficient staffing of Council
lack of a communication strategy with the public
Council is not independent in the performance of its work
government ignores Council media views on the state of fiscal policy
media views and public discussions do not contribute to the better state of public finances
low level of democracy in a society, which is why the impact of public has weakened
low level of press freedom, which is why the media do not publish critical views on the government's fiscal policy
other, please specify

21. How does the public respond to the information in the media about the lack of transparency and (politicians’) responsibility in the budget process?

by public debates and pressing politicians on more transparent and more responsible behaviour in the budget process
by public discussions, but without pressing politicians on more transparent and more responsible behaviour in the budget process by constantly pressing politicians on more transparent and more responsible behaviour in the budget process
has evidence of the lack of transparency and (politicians’) responsibility in the budget process, but is not responding
has no knowledge of and shows no interest in the state of public finances

Additional information

22. How do you estimate the level of information of your citizens about the existence and activities of your fiscal council?

insufficient
barely sufficient
good
very good
exceptionally well-informed

Additional information

23. What has so far been the impact of your fiscal council on the public information about the state of public finances and on the increase in fiscal transparency and (politicians’) accountability in the budget process?

insufficient
sufficient
good
very good
excellent

Additional information

24. How do fiscal rules and IFIs influence transparency and (politicians’) accountability in the budget process?

by informing the public through media, and the public then influences the politicians’ reputation and rating at the elections
by public disclosure of information about the compliance with fiscal rules and increased communication with the media
by enhanced communication analysis, evaluation and reporting of independent fiscal institutions
by promoting fiscal transparency and accountability
by transparency of the work of an independent fiscal institution as an example of good practice
Other, please specify

25. When does your fiscal council especially issue warnings about the state of public finances?
(multiple replies possible)

in the event of a conflict between the proposed budget and the goals set out
in the case of overoptimistic forecasts
in the event of excessive government spending
in the case of unsustainable tax policy
in the case of worse fiscal performance than anticipated
to indicate the actual state of fiscal policy
to raise public awareness on the importance of sound public finances
other, please specify

26. Do you think that fiscal rules and IFIs can be powerful communication tools in order to increase fiscal transparency and (politicians’) accountability in the budget process?

yes, please specify how
no, please specify reasons

Table 1
Number and percent of answers to individual questions in the questionnaire (N = 18)

Questions (variable)	N	%
How does your fiscal council communicate with the public?	18	100
How often does your fiscal council communicate with the public?	16	89
What is the average annual media coverage of the activities of your fiscal council?	13	72
Which of the media issues the largest number of releases on the work of your fiscal council?	16	89
How do you assess the media visibility of compliance with fiscal rules?	17	94
How do you assess the media visibility of noncompliance with fiscal rules?	16	89
Please describe the reaction of the government in relation to the assessment of noncompliance with national fiscal rules	15	83
How to increase the media visibility of compliance with the rules?	15	83
Does the higher media visibility of compliance with the rules and more effective communication of the council contribute to transparency and (politicians’) accountability in the budget process?	15	83
How to increase the impact of councils on fiscal transparency and (politicians’) accountability in the budget process?	11	61
How do you estimate the level of information of your citizens about the existence and activities of your fiscal council?	15	83
What has so far been the impact of your fiscal council on public information about the state of public finances and on the increase in fiscal transparency and (politicians’) accountability in the budget process?	17	94
How does the public respond to the information in the media about the lack of transparency and about (politicians’) responsibility in the budget process?	13	72
How do fiscal rules and fiscal councils influence transparency and (politicians’) accountability in the budget process?	14	78
Do you think that fiscal rules and fiscal councils can be powerful communication tools in order to increase fiscal transparency and (politicians’) accountability in the budget process?	17	94

Source: Questionnaire responses.

Table 2
Channels of communication with the public

Communication modes

∑

website

●

press releases

●

briefing

●

press conferences

●

social groups

●

interviews

●

PR or marketing agencies

●

other

●

frequency

Source: Questionnaire responses.

Table 4
Is monitoring of the compliance with fiscal rules publicly available?

council’s web site

●

press releases

●

briefings with journalists

●

press conferences

●

presented in parliament

●

other, please specify

●

Source: Author’s questionnaire results.

Other:

Germany – by presentation in the parliament and legally secured in special cases (presentation of reports in case of non-compliance with fiscal rules in the Federal Parliament and in the State Parliaments).

Netherlands – The Quarterly Review, a CPB publication related to the budget cycle, provides numerous opportunities for assessing compliance with national and EU fiscal rules.

Portugal – a web site release – in the annual fiscal performance reports, annual budget plans and medium-term stability programs.

Sweden – annual report is published in electronic and printed form.

Table 5
How can the impact of councils on fiscal transparency and accountability in the budget process be increased?

by strengthening council’s power through national legislation changes

●

by strengthening council’s power through changes in European legislation (SGP)

●

by more efficient communication with the public

●

by increasing the number of public debates on fiscal policy in the media

●

other, please specify

●

Source: Author’s questionnaire results.

Other:

France – the influence is already high.

Ireland – by producing quality analyses and effectively communicating the results with the parliament.

Portugal – building a reputation is essential in order to ensure social significance. If quality or independence is lacking in its analysis, no marketing plan could preserve the fiscal council.

Romania – by increasing the public awareness to be implicated in the process of how the government spend the public money, not just in the short-term but also in the medium-term.

Sweden – A strong council needs a legislative background, but the legislative background does not guarantee a strong council. The strength of the institution ultimately depends on the quality and credibility of its work, not its legal status.

Table A2
When does your fiscal council usually communicate with the public?

significant fiscal events

●

changes in in fiscal policy

●

tax policy is out of the framework

●

compliance/non-compliance with the rules

●

ahead of parliamentary elections and during the campaign

●

failures in fiscal policy

●

other

●

Source: Author's questionnaire results

Other:

Austria - by publication calendar (studies, recommendations, etc.).

Cyprus - every fall and spring (specified in legislation) if it considers that EU or national rules have been breached.

Denmark - The Council meets twice a year and the Presidency prepare a report for each Council meeting. The report contains economic analysis and policy recommendations on economic policy, as well as short and medium-term forecasts on the key indicators of the Danish economy. The report also includes the Presidency assessment of fiscal policy goals – e.g. adherence to the national Budget Law, adherence to EU rules and assessment of long-term fiscal sustainability. The Presidency is independently responsible for the reports and acts as a Danish "fiscal watchdog". The preliminary version of the report is presented and discussed at the Council meeting. The reports are published immediately after the meeting. Council members' comments are added in the final version of the report. Following the Council meeting the Presidency holds a press conference.

France - for each budget and SGP.

Ireland - With regard to the first reply, the primary Council communicates with the public at the time of the release of the main reports. Council members and the president sometimes participate in media interviews throughout the year. The president usually participates in fewer media inclusions, the morning after the annual budget is announced in October each year, to give an initial reaction to the budget.

Latvia - The Law on Fiscal Discipline gives the Latvian Fiscal Council a broad mandate (Article 28) so that it communicates in all cases where it considers it important.

Netherlands - CPB publishes Quarterly Reviews, a budget cycle publication. This provides numerous opportunities for assessing compliance with national and EU fiscal rules. In September, opposition parties seek an analysis of their alternative budget. The CPB provides analysis of political parties' electoral programs. It also provides analysis of Government agreements and major additional policy packages.

Portugal - usually when a publication is issued or when a senior council member intervenes at a public event. It publishes an average of 1.5 publications per month, but amount is not the same every month.

Romania - on the eve of parliamentary elections and during the election campaign to keep voters impartially informed - only when the Council is asked.

Sweden – FPC may decide to hold a press conference at a time when it believes there is a failure in fiscal policy (breach of fiscal rule) and a need for action (e.g. regarding fiscal effects of immigration in 2015). FPC does not hold regular press conferences and tries to stay away from direct involvement in the budget process or election campaigns.

UK - in the case of significant fiscal developments and medium-term forecasts while all other outputs are published at a time of the institution’s own choosing.

Table A3
When does your fiscal council especially give warnings about the state of public finances?

conflict between proposed budget and goals set out

●

overoptimistic forecasts

●

excessive government spending

●

unsustainable tax policy

●

worse fiscal performance than anticipated

●

indicate the actual state of fiscal policy

●

to raise public awareness

●

other

●

Source: Author's questionnaire results

Other:

Denmark - The Council meets twice a year and the Presidency prepares a report for each of the meetings. The report contains economic analysis and policy recommendations on economic policy, as well as short- and medium-term forecasts on the key indicators of the Danish economy. It also includes the Presidency assessment of fiscal policy goals – e.g. adherence to the national Budget Law and to EU rules, and assessment of long-term fiscal sustainability. The Presidency is independently responsible for the reports and acts as a Danish "fiscal watchdog". The preliminary version of the report is presented and discussed at the Council meeting. The reports are published immediately after the meeting. Council members' comments are added in the final version of the report. Following the Council meeting, the Presidency holds a press conference.

Germany - Alerts are inseparable with the tasks of the Stability Council. It makes significant reference to budgetary surveillance to avoid budgetary urgency (warning of a specified budgetary emergency) and to monitoring compliance with EU budgetary discipline requirements (more on tasks on the Council's website).

Netherlands - The CPB provides the data for assessment. It does not provide explicit warnings.

Portugal - whenever CFB publishes its regular reports. Council does not publish analyses or comments in reaction to particularly events.

Romania - in the case of major fiscal measures envisaged by the government.

UK - OBR publishes its forecasts at the same time as the Ministry of Finance the main announcement of the policy. The OBR does not give warnings about the "state" of public finances, but presents detailed analyses so that everyone can judge the fiscal position.

Table A5
The legal determination of the councils’ communication with the public

Council	Fiscal Responsibility Act (FRA) - Communication with the public
Denmark	The type and timing of the reports is published on De Økonomiske Råd
France	Under the law in place, the council publishes opinions on Haut Conseil des Finances Publiques
Greece	There is no FRA or legally determined public release of information, but it does publish certain information on Parliamentary Budget Office
Luxembourg	There is no FRA nor is a specific public disclosure of information determined, but certain information is published on Cour des comptes du Grand-Duché de Luxembourg
Croatia	The FRA and the Rules of Procedure determine the publication of certain information on 9th term of the Croatian Parliament
Ireland	The FRA does not specify how information and / or communication with the media is published, but it is transparent on Irish Fiscal Advisory Council
Hungary	The Action Plan determines the publication of information on Action Planof the Fiscal Council for the year 2016
The Netherlands	The manner and dynamics of information publication and communication are published on CPB Netherlands Bureau for Economic Policy Analysis
Germany	Several laws determine the operation of the council, and the public disclosure of the report is determined by specific rules and procedures. Available at The Stability Council
Portugal	Article 32 FRA provides for the publication of a report and all relevant information for the operation of the council on Porutguese Public Finance Council
Sweden	The manner and dynamics of information publication and communication are published on Swedish fiscal policy council
UK	Several laws define the work of the OBR, as well as the manner and dynamics of information disclosure, emphasizing transparency in its work, and in particular the Budget Accountability Charter. Available at Office for Budget Responsibility

Source: Author.

Table A6
What are the obstacles to increasing the impact of your council on fiscal transparency and accountability in the budget process?

insufficient staffing of the council

●

lack of a communication strategy

●

council is not independent

government ignores council and media views on the state of fiscal policy

●

media views and public discussions do not contribute to the better state of public finances

●

low level of democracy in a society, which is why the impact of the public is weak

●

low level of press freedom, which is why media do not publish critical views on government's fiscal policy

other, please specify

●

Source: Author’s questionnaire results

Other:

France - no obstacles.

Germany - no obstacles, as the federal budgetary autonomy system does not permit direct control of the budget process, e.g. the process of drafting government budgetary and financial plans by the central instance. The parliaments enacting the budgetary and financial plans are highest instance representing the public.

Greece - our office should have a more "executive role" (in the legislative sense).

Ireland - insufficient staff of the council is currently not the major issue but could be a limiting factor in the future if demands on the council increase.

Latvia - no obstacles. It is necessary to implement a developed communication strategy.

Luxembourg - still lacking access to data; "comply or explain" principle could be clarified in the long term through the Memorandum of understanding.

Malta - usually media do not properly emphasize the state of public finances, unless there are significant risks of severe deterioration in fiscal position, or serious noncompliance with the EU fiscal rules.

Netherlands - no major obstacles.

Romania - reputational costs for politicians and government are not contained in legislation.

Sweden - we are a small institution (staff of five people) so there are limits to what we can do, but we really enjoy independence and are free to communicate with the public whenever and in whatever way we choose.

UK - no obstacles.

Table A7
Comparison of six EU fiscal councils’ impact on transparency and accountability

Council	HR Commission on Fiscal Policy	IE Irish Fiscal Advisory Council (IFAC)	HU Fiscal Council	NL Netherlands Bureau for Economic Policy Analysis (CPB)	SE Swedish Fiscal Policy Council	UK Office for Budget Responsibility (OBR)
Impact on transparency and accountability in the budget process	Promoting fiscal transparency and accountability, monitoring fiscal sustainability	Promoting fiscal transparency and accountability, transparency analysis, monitoring fiscal sustainability, preparing public reports with media impact and promoting sound public policies	Monitoring fiscal sustainability and promoting sound public policies	Promoting fiscal transparency and accountability, monitoring fiscal sustainability, preparation of public reports with media influence	Preparation of public reports that influence media reporting and promotion of sound public policies	Promoting fiscal transparency and accountability and preparing public reports to influence media reporting
Results so far in informing the public and increasing transparency and accountability	Good	Good	Good	Good	Good	Good
Impact of fiscal rules and councils on transparency and accountability in the budget process	Public disclosure of information on compliance with fiscal rules and communicating analyses, evaluations and reports	Through the media	Promoting transparency and accountability, and transparency of work	Through the media, the public then affects the reputation of the politician, publicly disclosing information on compliance with fiscal rules and communicating analyses, evaluations and reports, and promoting transparency and accountability	Public disclosure of information on compliance with fiscal rules and communicating analyses, evaluations and reports, and transparency of work	Through the media, the public influences the reputation of politicians, public disclosure of information on compliance with fiscal rules and communication of analyses, assessments and reports, promoting transparency and accountability, and transparency of work
Public finance alerts	In case of excessive government spending	Disagreement on proposed budgets and stated goals, over-optimistic forecasts, excessive government spending, unsustainable tax policies, poor fiscal performance, reference to the realities and raising public awareness of sound finances	Disagreement of proposed budgets with stated goals, over-optimistic forecasts, poorer fiscal performance than projected, reference to actual situation	Provides data for assessing the situation	Disagreement on proposed budgets and goals, over-optimistic forecasts, excessive government spending, and raising public awareness of sound finances	Council presents its view on public finances at the same time as the Ministry of Finance of the main announcement, does not warn but presents detailed analysis
Public reaction to the media's findings on the non-transparency and irresponsibility	Constant pressure for the sake of transparency and accountability	It is difficult to measure public reaction. From the media reaction, most media outlets and major economic reporters are catching on to the main points / criticism of the budget / SGP that are contained in the reports	Public debates and pressure for transparency and accountability	The issue is not relevant to them	For the most part, the national fiscal backbone is working well and for the most part politicians respect it. There is relatively strong public support for fiscal discipline and therefore the political cost of financial irresponsibility is potentially high	It is not up to OBR to answer this question

Source: Autor's questionnaire results

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