The Career of Rule Based Budgeting in Hungary : The Success of an European Solution in Fiscal Stability, Sustainable Development and in Improving Efficiency

Kovács, Árpád (2019) The Career of Rule Based Budgeting in Hungary : The Success of an European Solution in Fiscal Stability, Sustainable Development and in Improving Efficiency. POLGÁRI SZEMLE: GAZDASÁGI ÉS TÁRSADALMI FOLYÓIRAT, 15 (Spec). pp. 63-92. ISSN 1786-6553

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Abstract

Starting from the macro processes of the national economy and public finances the article examines three economic-public finance turnarounds in Hungary: the improvement of financial stability, the sustainability of the outstanding economic growth and the improvement of efficiency to be achieved and in all of this the role of rule-based budgeting. It shall introduce the regulatory and institutional solutions of the latter i.e. how this service, as a logical consequence of a framework, became a useful part of the financial policy by implementing its rules and – as an annual realisation of the above – a useful part of the budgeting practice. The article reaches the conclusion that it was unavoidable to “elevate” the major stipulations of the rule-based budgeting and the rules of the guarantee-like operation of the institution guarding over the implementation of these rules in the Fundamental Law of Hungary in 2011 to thus strengthen budgetary responsibility. Additionally, the article is dealing with the relations of the Hungarian and EU regulations, the main characteristic features of the work of the Fiscal Council, the FC’s recommendations made during the past nine years and the effects of the said recommendations.

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