Budget Reform In OECD Member Countries：Common Trends.pdf

BUDGET REFORM IN OECD MEMBER COUNTRIES: COMMON TRENDS 1. Introduction From the early 1990’s, the fiscal position of OECD Member countries improved steadily each year, from a deficit of 5% of GDP for Member countries as whole in 1993 to a perfect balance in the year 2000, i.e. neither a deficit nor a surplus. Last year, OECD Member countries experienced a deficit of 1% of GDP. Table 1 depicts the general government financial balances of selected OECD Member countries. This goes to show the historical pattern in Member countries: achieving fiscal consolidation is a slow process and successes in fiscal consolidation can quickly dissipate. A very short time ago, several OECD Member countries believed that they were on a long-term track for fiscal surpluses, the era of deficits had been overcome. This did not turn out to be the case; surpluses turned out to be a very short-lived phenomenon for many countries. Table 1. General government financial balance Surplus (+) or deficit (-1) as a percentage of nominal GDP 1993 1994 1995 1996 1997 1998 1999 2000 2001 OECD -5.0 -4.2 -3.9 -3.2 -1.8 -1.4 -0.9 0.0 -1.0 EU -6.4 -5.6 -5.3 -4.3 -2.5 -1.7 -0.8 0.5 -0.8 US -5.0 -3.6 -3.1 -2.2 -0.9 0.3 0.8 1.7 0.5 Japan -2.4 -2.8 -4.2 -4.9 -3.7 -5.5 -7.1 -7.4 -7.1 Germany -3.1 -2.4 -3.3 -3.4 -2.7 -2.2 -1.6 1.2 -2.7 France -6.0 -5.5 -5.5 -4.1 -3.0 -2.7 -1.6 -1.4 -1.4 UK -7.9 -6.7 -5.8 -4.4