Abstract
Independent fiscal institutions (IFIs) have been established or reformed in all eurozone countries following the reform of economic governance. As they are expected to counter the deficit bias of the governments and the information asymmetry of the legislatures and the public over the management of the budget, IFIs may support or even strengthen parliamentary accountability. This hypothesis is tested with regard to three IFIs, the Irish Fiscal Advisory Council, the Italian Parliamentary Budget Office, and the Spanish Independent Authority for Fiscal Responsibility. Although the economic context in which the IFIs were created was similar in the three eurozone countries, as was their mandate, these institutions have a rather different institutional positioning, being within the Parliament, in Italy; within the Executive, in Spain; and a stand-alone body in Ireland. This is likely to influence the IFIs’ contribution to parliamentary accountability, we hypothesize that the closer the position of an IFI and its contacts to the parliament, the stronger is the scrutiny of the executive on budgetary policies. The analysis of parliamentary questions, hearings, and of the activation of the ‘comply or explain’ procedures shows that, overall, the IFIs’ potential role to enhance parliamentary accountability has remained underexploited by the three legislatures, with no significant differences as for the institutional positioning of the IFI.
Highlights
Ten years after the reform of European economic gov‐ ernance, its medium‐term implications on democratic accountability are still to be explored to a large extent
Regarding the independent fiscal institutions (IFIs)’ positioning, it can be expected that when such an insti‐ tution takes the form of a parliamentary budget office, the collaboration between the IFI and the legislature can allow the Parliament to make the most of the informa‐ tion flow deriving from the IFI to control the government and to use the ‘comply or explain’ procedure as a fur‐ ther accountability tool compared to the case of a stand‐ alone fiscal council or an IFI established within the exec‐ utive, with its looser relationship with the legislature
The contribution of IFIs to parliamentary accountabil‐ ity is assessed in three eurozone countries, Ireland, Italy, and Spain, countries which are associated with limited levels of compliance with EU deficit and debt rules and which were beset by seri‐ ous financial troubles during the euro crisis
Summary
Ten years after the reform of European economic gov‐ ernance, its medium‐term implications on democratic accountability are still to be explored to a large extent. The IFIs’ insti‐ tutional ‘embedding’ in terms of proximity to the par‐ liament can vary depending on the appointment proce‐ dures, the frequency of the contact, especially if man‐ dated by law, and on the consequences of the IFI’s activ‐ ity on the government (e.g., how the ‘comply or explain’ procedure is activated and with which consequences for the legislature) From this elaboration on parliamentary accountabil‐ ity and on the rationales for the setting up of IFIs, two guiding hypotheses can be derived. Regarding the IFIs’ positioning, it can be expected that when such an insti‐ tution takes the form of a parliamentary budget office, the collaboration between the IFI and the legislature can allow the Parliament to make the most of the informa‐ tion flow deriving from the IFI to control the government and to use the ‘comply or explain’ procedure as a fur‐ ther accountability tool compared to the case of a stand‐ alone fiscal council or an IFI established within the exec‐ utive, with its looser relationship with the legislature
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