Quality of Public Finances - An implementation of the EU Commission approach for developing a conceptual framework for Germany
The concept of Quality of Public Finances reflects the increasing necessity to regard the interaction between macroeconomic development and public finances not exclusively from a macroeconomic point of view. Particularly in the context of the Stability and Growth Pact it has become obvious that approaches for quantitative goals of consolidation alone do not accomplish member state policies of combining fiscal sustainability with promotion of growth and employment in the sense of Lisbon-strategy. This is where Quality of Public Finances comes in. It tries to identify the variables usually "missing" in a classical macroeconomic approach and to implement a coherent concept of growth-orientated fiscal policy.
In 2004, the working group "Quality of Public Finances"(WGQPF) was founded under the head of the committee for economic policy of the European Union. This working group has taken up - in collaboration with the European Commission - all relevant administrative and scientific preparatory work and has shaped the further development of the concept significantly since then. At the beginning, the focus was mainly set on the growth effects of the volume and composition of public spendings, similar to the WNA approach. In the meantime, the quality concept has gained breadth significantly. Institutional, procedural and revenue aspects of fiscal quality are especially recognized. By the paper "The Quality of Public Finances: A Roadmap for Deriving a Conceptual Framework and a Set of Indicators", the European Commission provides suggestions how to implement the various dimensions of the quality discussion into a consistent indicator concept.
The research project aims to support and to accompany the European Commission during the process of establishing a conceptual framework to evaluate the quality of public finances. In the process, the methods already existing and designated by the European Commission are to be applied to Germany. Already selected indicators will be analyzed with respect to their growth effects. Finally, the "Fallstudie Deutschland" is to provide insight about the validity of the quality concept and to lead to approaches to complete the conceptual framework of the European Commission.
|Auftraggeber||German Federal Ministry of Finance (BMF)|
|Bearbeiter||Dr. Michael Thöne, Dr. Stephan Dobroschke|