A Toolkit to Strengthen Government Budget Surveillance

  1. Pedregal Tercero, Diego José
  2. Pérez, Javier J.
  3. Sánchez Fuentes, Antonio Jesús
Revista:
Hacienda Pública Española / Review of Public Economics

ISSN: 0210-1173

Año de publicación: 2014

Número: 211

Páginas: 117-146

Tipo: Artículo

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Otras publicaciones en: Hacienda Pública Española / Review of Public Economics

Resumen

In this paper we develop a comprehensive short-term fiscal forecasting system, useful for real-time monitoring of government�s borrowing requirement in Spain, a country that has been at the center of the recent European sovereign debt crisis, not least because of sizeable failures to meet public deficit targets. The system is made of a suite of models, with different levels of disaggregation (bottom-up vs top-down; general government vs sub-sectors) suitable for the automatic processing of the large amount of monthly/quarterly fiscal data published nowadays by Spanish statistical authorities. Our tools are instrumental for ex-ante detection of risks to official projections, and thus can help in reducing the ex-post reputational costs of budgetary deviations. On the basis of our results, we discuss how official monitoring bodies could expand, on the one hand, their toolkit to evaluate regular adherence to targets (moving beyond a legalistic approach) and, on the other, their communication policies as regards sources of risks of (ex-ante) compliance with budgetary targets.

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