28 July 2010

Office of Budget Responsibility (OBR)

In a Guardian article Lars Calmfors, chairman of the Swedish Fiscal Policy Council, comments that when the Coalition government set up the British equivalent OBR, it failed to grasp the need for the absolute independence that gives a financial watchdog credibility, ignoring the experiences of similar bodies set up recently in Sweden, Canada, Hungary and Slovenia, and long established in the Netherlands, Denmark and the United States.
It was not just that experiences with similar institutions elsewhere were ignored – and academic discussion of them not taken into account – but that a number of established principles for such bodies were actually violated. . . .  The OBR's independence must be taken more seriously. The British debate is moving in the right direction. But it needs to move more. And the debate would benefit greatly from being less national and taking more account of experiences elsewhere.
Gosh, who would have thunk it? Whitehall ignoring the precedents and experiences of other countries! Much better to muddle through - look how well it's worked for the last hundred years or so. The envy of the world.

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