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THE ACADEMY
OF FINANCIAL
MANAGEMENT
.

№ 1/2019

№ 1/2019

Nauk. pr. NDFI 2019 (1): 18–31
https://doi.org/10.33763/npndfi2019.01.018

PUBLIC FINANCES

KONOVALENKO Dmytro 1

1SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-6314-3525


Fiscal rules and general government deficit management


The article examines global trends and urgent problems of implementation of fiscal rules in international practice, which are targeted at fulfillment of the macro stabilization function of public finance and tackling the general government deficit. The article also reveals their essence, components and entitlements, as well as identifies the major prerequisites for their implementation. The article shows a systematic generalization of fiscal rules in emerging market countries. The existing fiscal rules of the European Union member states, the Central African Economic and Monetary Community (CEMAC), East African Monetary Union (EAMU), Eastern Caribbean Currency Union (ECCU) and other countries with emerging markets are being analyzed. The authors identify the patterns of design of the types of fiscal rules and their parameters in countries with similar to Ukrainian level of development. The experience of using national and supranational fiscal rules is presented. On the basis of IMF data, several criteria, according to which the process of implementation of the fiscal rule can be considered as completed, are systematized. The authors emphasize that the process of implementation of fiscal rules in Ukraine is only at its initial stage: legally established numerical values of fiscal rules for the state budget deficit and public debt require further development of monitoring mechanisms, control and responsibility mechanisms for compliance with fiscal rules, as well as strengthening their flexibility in the event of emergencies. The authors assess the retrospective dynamics and make the medium- term forecast of the general government deficit and public debt, which are based on the authors\\\\\\\\\\\\\\\' economic- mathematical model \\\\\\\\\\\\\\\"Ekvilibro\\\\\\\\\\\\\\\" with application of the scenario macroeconomic conditions of the Ministry of Economic Development and Trade of Ukraine. The article highlights the urgency of implementation of the fiscal rules in the practice of public financial management in Ukraine given the high level of fiscal risks in the national economy.

Keywords:government finances, fiscal rules, general government deficit, public debt

JEL: E62, E66, H62, H63


Konovalenko D. . Fiscal rules and general government deficit management / D. Konovalenko // Наукові праці НДФІ. - 2019. - № 1. - C. 18-31.

Article original in Ukrainian (pp. 18 - 31) DownloadDownloads :1065
1. Bohdan, T. P. (2016). Fiscal rules as an essential component of advanced fiscal institutions. Finance of Ukraine, 4, 7-26 [in Ukrainian].

2. Schaechter, A., Kinda, T., Budina, N., & Weber, A. (2012). Fiscal Rules in Response to the Crisis-Toward the "Next-Generation" Rules. A New Dataset. IMF Working Paper, WP/12/187.
doi.org/10.5089/9781475505351.001

3. Vdovychenko, A. (2017). The function of the fiscal policy response and fiscal sustainability in Ukraine. Herald of the National Bank of Ukraine, 240, 24-38 [in Ukrainian].
doi.org/10.26531/vnbu2017.240.022

4. Gasanov, S. S. (2018). Fiscal rules and fiscal responsibility: economic security context. Finance of Ukraine, 3, 7-23 [in Ukrainian].
doi.org/10.33763/finukr2018.03.007

5. Iefymenko, T. (2016). Fiscal Reforms and Sustainable Development in Ukraine. Finance of Ukraine, 3, 7-14.

6. Ivanytska, O. M., Koshchuk, T. V. (2018). Methodological grounds of fiscal risks identification. Finance of Ukraine, 6, 45-57 [in Ukrainian].
doi.org/10.33763/finukr2018.06.045

7. Kudriashov, V. P. (2018). Management of budget operations according to fiscal rules. Finance of Ukraine, 12, 31-51 [in Ukrainian].
doi.org/10.33763/finukr2018.12.031

8. Kumar, M., Baldacci, E., & Schaechter, A. (2009). Fiscal Rules-Anchoring Expectations for Sustainable Public Finances. IMF Staff Paper. Retrieved from www.imf.org/external/np/pp/eng/2009/121609.pdf.

9. International Monetary Fund. (2017, March). What are Fiscal Rules? Fiscal Rules Dataset. Retrieved from www.imf.org/external/datamapper/fiscalrules/map/map.htm.

10. Iefymenko, T. I., Yerokhin, S. A., & Bohdan, T. P. (Eds.). (2014). The debt sustainability of public finances. Kyiv: DNNU "Akademiia finansovoho upravlinnia" [in Ukrainian].

11. International Monetary Fund. (2017, March). Data. Fiscal Rules Dataset. Retrieved from www.imf.org/external/datamapper/fiscalrules/fiscal_rule_database.zip.

12. International Monetary Fund. (2017, March). Fiscal Rules at a Glance. Retrieved from www.imf.org/external/datamapper/FiscalRules/Fiscal%20Rules%20at%20a%20Glance%20-%20Background%20Paper.pdf.

13. International Monetary Fund. (2017, March). Rules Characteristics. Fiscal Rules Dataset. Retrieved from www.imf.org/external/datamapper/FiscalRules/other/char.htm.

14. International Monetary Fund. (2015). West African Economic and Monetary Union - Common Policies of Member Countries. IMF Country Report No. 15/100.
doi.org/10.5089/9781484325261.002

15. Caselli, F., Reynaud, J. (2018). Do Fiscal Rules Improve the Fiscal Balance? A New Instrumental Variable Strategy. IMF Working Paper, WP/19/49.
doi.org/10.5089/9781498300865.001

16. Eyraud, L. et al. (2018, April). Second-Generation Fiscal Rules: Balancing Simplicity, Flexibility, and Enforceability. Staff Discussion Notes, 18/04.
doi.org/10.5089/9781484350683.006

17. Duncan, L. (2016). Designing and Enforcing Fiscal Rules. In Sound Fiscal Institutions: The Basis for Stability, Growth and Prosperity. Vienna: Joint Vienna Institute.

18. Verkhovna Rada of Ukraine. (2010). Budget Code of Ukraine (Act No. 2456-VI, July 8). Retrieved from zakon.rada.gov.ua/laws/show/2456-17 [in Ukrainian].

19. International Monetary Fund. (2014). Government Finance Statistics Manual 2014 (GFSM 2014). Retrieved from www.imf.org/external/Pubs/FT/GFS/Manual/2014/gfsfinal.pdf.

20. Bohdan, I. V., Konovalenko, D. V., & Yara, T. Yu. (2018). Economic mathematical models for the diagnostics of fiscal policy. Finance of Ukraine, 3, 43-66 [in Ukrainian].
doi.org/10.33763/finukr2018.03.043

21. Bohdan, I. V., Konovalenko, D. V., & Yara, T. Yu. (2018). Economic and mathematical modeling of Ukraine's public finances. Finance of Ukraine, 7, 27-49 [in Ukrainian].
doi.org/10.33763/finukr2018.07.027

22. Cabinet of Ministers of Ukraine. (2018). On approval of the Forecast of economic and social development of Ukraine for 2019-2021 (Decree No. 546, July 11). Retrieved from zakon.rada.gov.ua/laws/show/546-2018-%D0%BF [in Ukrainian].


1. Bohdan, T. P. (2016). Fiscal rules as an essential component of advanced fiscal institutions. Finance of Ukraine, 4, 7-26 [in Ukrainian].

2. Schaechter, A., Kinda, T., Budina, N., & Weber, A. (2012). Fiscal Rules in Response to the Crisis-Toward the "Next-Generation" Rules. A New Dataset. IMF Working Paper, WP/12/187.
doi.org/10.5089/9781475505351.001

3. Vdovychenko, A. (2017). The function of the fiscal policy response and fiscal sustainability in Ukraine. Herald of the National Bank of Ukraine, 240, 24-38 [in Ukrainian].
doi.org/10.26531/vnbu2017.240.022

4. Gasanov, S. S. (2018). Fiscal rules and fiscal responsibility: economic security context. Finance of Ukraine, 3, 7-23 [in Ukrainian].
doi.org/10.33763/finukr2018.03.007

5. Iefymenko, T. (2016). Fiscal Reforms and Sustainable Development in Ukraine. Finance of Ukraine, 3, 7-14.

6. Ivanytska, O. M., Koshchuk, T. V. (2018). Methodological grounds of fiscal risks identification. Finance of Ukraine, 6, 45-57 [in Ukrainian].
doi.org/10.33763/finukr2018.06.045

7. Kudriashov, V. P. (2018). Management of budget operations according to fiscal rules. Finance of Ukraine, 12, 31-51 [in Ukrainian].
doi.org/10.33763/finukr2018.12.031

8. Kumar, M., Baldacci, E., & Schaechter, A. (2009). Fiscal Rules-Anchoring Expectations for Sustainable Public Finances. IMF Staff Paper. Retrieved from www.imf.org/external/np/pp/eng/2009/121609.pdf.

9. International Monetary Fund. (2017, March). What are Fiscal Rules? Fiscal Rules Dataset. Retrieved from www.imf.org/external/datamapper/fiscalrules/map/map.htm.

10. Iefymenko, T. I., Yerokhin, S. A., & Bohdan, T. P. (Eds.). (2014). The debt sustainability of public finances. Kyiv: DNNU "Akademiia finansovoho upravlinnia" [in Ukrainian].

11. International Monetary Fund. (2017, March). Data. Fiscal Rules Dataset. Retrieved from www.imf.org/external/datamapper/fiscalrules/fiscal_rule_database.zip.

12. International Monetary Fund. (2017, March). Fiscal Rules at a Glance. Retrieved from www.imf.org/external/datamapper/FiscalRules/Fiscal%20Rules%20at%20a%20Glance%20-%20Background%20Paper.pdf.

13. International Monetary Fund. (2017, March). Rules Characteristics. Fiscal Rules Dataset. Retrieved from www.imf.org/external/datamapper/FiscalRules/other/char.htm.

14. International Monetary Fund. (2015). West African Economic and Monetary Union - Common Policies of Member Countries. IMF Country Report No. 15/100.
doi.org/10.5089/9781484325261.002

15. Caselli, F., Reynaud, J. (2018). Do Fiscal Rules Improve the Fiscal Balance? A New Instrumental Variable Strategy. IMF Working Paper, WP/19/49.
doi.org/10.5089/9781498300865.001

16. Eyraud, L. et al. (2018, April). Second-Generation Fiscal Rules: Balancing Simplicity, Flexibility, and Enforceability. Staff Discussion Notes, 18/04.
doi.org/10.5089/9781484350683.006

17. Duncan, L. (2016). Designing and Enforcing Fiscal Rules. In Sound Fiscal Institutions: The Basis for Stability, Growth and Prosperity. Vienna: Joint Vienna Institute.

18. Verkhovna Rada of Ukraine. (2010). Budget Code of Ukraine (Act No. 2456-VI, July 8). Retrieved from zakon.rada.gov.ua/laws/show/2456-17 [in Ukrainian].

19. International Monetary Fund. (2014). Government Finance Statistics Manual 2014 (GFSM 2014). Retrieved from www.imf.org/external/Pubs/FT/GFS/Manual/2014/gfsfinal.pdf.

20. Bohdan, I. V., Konovalenko, D. V., & Yara, T. Yu. (2018). Economic mathematical models for the diagnostics of fiscal policy. Finance of Ukraine, 3, 43-66 [in Ukrainian].
doi.org/10.33763/finukr2018.03.043

21. Bohdan, I. V., Konovalenko, D. V., & Yara, T. Yu. (2018). Economic and mathematical modeling of Ukraine's public finances. Finance of Ukraine, 7, 27-49 [in Ukrainian].
doi.org/10.33763/finukr2018.07.027

22. Cabinet of Ministers of Ukraine. (2018). On approval of the Forecast of economic and social development of Ukraine for 2019-2021 (Decree No. 546, July 11). Retrieved from zakon.rada.gov.ua/laws/show/546-2018-%D0%BF [in Ukrainian].