Political economy of fiscal responsibility

The economy requires a fiscal battle plan and this, in turn, requires a fiscal responsibility framework

The International Monetary Fund and the Organisation for Economic Co-operation and Development, long advocates of fiscal restraint, are now advocating expansionary fiscal policies. Some commentators see this as an argument against fiscal rules and fiscal responsibility legislation. They have, unwittingly, bought into two false binaries developed by multilateral institutions to allow them cookie-cutter agency in influencing fiscal policy. These are: (1) Government debt should not continuously increase as a proportion of gross domestic product. If a “debt sustainability analysis” shows this is the case, then governments must reduce borrowing by cutting fiscal deficits. (2) Governments should spend and borrow more