IMF Working Papers

Fiscal Rules and Fiscal Councils: Recent Trends and Revisions since the Pandemic

By Virginia Alonso-Albarran, Clara Arroyo, Ozlem Aydin, Hamid R Davoodi, Waikei Raphael Lam, Vybhavi Balasundharam, Gabriel Hegab, Anh D. M. Nguyen, Natalia Salazar, Galen Sher, Alexandra Solovyeva, Nino Tchelishvili

October 3, 2025

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Virginia Alonso-Albarran, Clara Arroyo, Ozlem Aydin, Hamid R Davoodi, Waikei Raphael Lam, Vybhavi Balasundharam, Gabriel Hegab, Anh D. M. Nguyen, Natalia Salazar, Galen Sher, Alexandra Solovyeva, and Nino Tchelishvili. "Fiscal Rules and Fiscal Councils: Recent Trends and Revisions since the Pandemic", IMF Working Papers 2025, 198 (2025), accessed October 4, 2025, https://doi.org/10.5089/9798229025072.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the evolving landscape of fiscal rules and fiscal councils worldwide, focusing on developments since the pandemic. Drawing on the latest updates to the IMF’s Fiscal Rules and Fiscal Councils databases—which cover more than 120 economies and 54 fiscal councils—it documents the increasing adoption of fiscal rules, particularly in emerging markets and developing economies. The analysis highlights improvements in the legal foundations and flexibility of fiscal rules, along with a growing role for effective fiscal councils in providing oversight. Despite these advancements, compliance remains uneven, with widespread and persistent deviations from deficit and debt rule limits. The paper introduces new indices to quantify the overall strength of fiscal rules and the institutional quality of fiscal councils, revealing significant cross-country variation and a positive correlation between the strength of rules and fiscal discipline.

Subject: Budget planning and preparation, COVID-19, Emerging and frontier financial markets, Expenditure, Financial markets, Fiscal councils, Fiscal policy, Fiscal rules, Health, Public financial management (PFM)

Keywords: Budget planning and preparation, Communications, Compliance, COVID-19, Emerging and frontier financial markets, Fiscal councils, Fiscal Councils, Fiscal rules, Fiscal Rules, Medium-Term Fiscal Framework

Publication Details

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