A Republican Assessment of Independent Fiscal Institutions

Abstract

Some economists have suggested that fiscal councils, rather than the government, should manage public debt. What are the democratic credentials of these institutions? This article answers this question from the point of view of republican democratic theory. In doing so, it develops a critique of Pettit’s strategy of depoliticization as a proper way to preserve the nondomination of citizens. Borrowing from the literature on deficit bias, the article argues instead that citizens and parliaments should be given the informational resources needed to keep the executive under sufficient republican control. This suggests that fiscal councils should not manage public debt but rather be used as tools to reduce the information asymmetry between executives and parliaments that drives deficit bias and that results in public powers being used arbitrarily.