Fiscal Rule Concept and Policy Framework

Abstract

In point of fact, the notions such as transparency and accountability have gained significance in recent years and have made fiscal discipline and fiscal rule more popular concept for achieving fiscal discipline. There observed an increase in the number of countries prefering to apply rules in fiscal policy between years 2000 and 2015. The fiscal policies of governments can lead to an increase in budget deficits and therefore debt stocks. The new financial crises have been built on such issues. The fiscal rule, which can be regarded as a rule-based policy tool, is the instrument of fiscal policy that can be used to ensure fiscal discipline and to prevent such problems from occurring. In this study, rule-based fiscal policies for ensuring fiscal discipline is explained specific to fiscal rule concept. This is a descriptive study that examines the terms fiscal discipline and fiscal rule and the relationship between them.