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Sweden: Watchdog with a Broad Remit

Sweden: Watchdog with a Broad Remit

(p.189) 10 Sweden: Watchdog with a Broad Remit
Restoring Public Debt Sustainability
Lars Calmfors
Oxford University Press

With its creation traced only indirectly to the financial crisis of the 1990s, the Swedish Fiscal Policy Council, established in 2007, has limited resources but a broad remit. In addition to monitoring the long-run sustainability of fiscal policy, the Council evaluates the short-run fiscal stance from a cyclical perspective. The Council also analyses employment and growth developments. Another task is to evaluate the motives, explanations, and analytical basis for government policies. According to the author, the setup of the Council appears consistent with the pre-existing institutional framework, with other institutions that conduct detailed budget evaluations and macroeconomic forecasts, and with a strong tradition of academic participation in the policy debate. However, the broad remit could lead to less focus on the fiscal watchdog role, as the Council plays a supervisory role in the general economic policy debate.

Keywords:   swedish Fiscal Policy, advisory role of fiscal council, academic participation in political debate, evaluation of short- and long-term effects of fiscal policy, analysis of macroeconomic effects

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