Sweden

1
Swedens Medium Term Framework

• Seoul, October 15, 2003
• Allan Gustafsson

2
Background

• Fiscal crises
• Ever increasing central government
• More-is-better syndrome
• Undisciplined behaviour by the parliament

3
Objectives

• Fiscal discipline (explicit)
• Reduce the size of the government (not explicit)
• Increase allocative efficiency (secondary)

4
Elements

• Global ceiling ceilings on expenditure areas
• Top-down voting top-down preparation
• Unalterable

5
Ceilings

• Rolling
• Global set for third year
• Indicate expenditure area ceilings for years 2
  and 3
• Firm expenditure area ceiling set in spring bill

6
Introduction

• Fiscal crises early 1990s
• Comparative study on budget processes in Europe
  lax
• Ministry of Finance leading role
• Active collaboration from Parliament
• General budget law

7
Experience

• Generally respected
• Some political grumbling
• Budget margin used up
• A bit of creative book-keeping

8
Effects

• Helped reduce fiscal imbalance
• Reduced the size of central government
• Enhanced efficiency

9
Shortcomings

• No solution to long-term issues
• Design not compatible with accounts
• Insufficient link to performance management

10
Alternative global ceilings
C o s t
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