BUDGETS
Key findings
Have policymakers pursued fiscally
sustainable budget policies?
sustainable budget policies?
Budgetary policy scores are weighted composites. A qualitative policy assessment [ 
] contributes one-half of this weighting, with five quantitative measures [ 
] each contributing an additional one-tenth.
Scores and methodology
] contributes one-half of this weighting, with five quantitative measures [ ] each contributing an additional one-tenth. Scores and methodology
BudgetsKey findings: Budgetary policy
Each 
represents an individual country and is positioned on a scale from 1 (lowest) to 10 (best). Position cursor over to see scores for individual countries.
Click country name in list or text for details.
represents an individual country and is positioned on a scale from 1 (lowest) to 10 (best). Position cursor over to see scores for individual countries.Click country name in list or text for details.
Score distribution
8.8
1
7.8
2
7.7
3
7.7
7.4
5
7.4
7.3
7
7.2
8
Top-performing countries in this category typically have budget surpluses, often paired with substantial levels of debt reduction (Canada, Ireland, Australia, Denmark, Finland, New Zealand).
Sweden has reestablished long-term stability after a severe economic crisis. Demographic changes threaten Denmark's surpluses.
New Zealand'spublic debt reduction has been accompanied by increases in private debt. Australia's budgetary surpluses mask often-significant debt on the state level.
Norway, a special case, receives substantial oil revenues that are invested for future use.
Sweden has reestablished long-term stability after a severe economic crisis. Demographic changes threaten Denmark's surpluses.
New Zealand'spublic debt reduction has been accompanied by increases in private debt. Australia's budgetary surpluses mask often-significant debt on the state level.
Norway, a special case, receives substantial oil revenues that are invested for future use.
6.7
9
6.6
10
6.6
6.1
12
6.1
5.9
14
5.9
5.8
16
5.5
17
5.5
5.3
19
Demographic challenges pose the largest threat to many of the countries in this group.
Aging populations will prove challenging to budget stability in a number of states (Luxembourg, South Korea, Belgium, Netherlands, Spain, Turkey, UK). Luxembourg and South Korea have pursued conservative spending policies, but structural issues remain.
The United Kingdom's budgets have been near balance, if not in surplus. Insufficient planning in Iceland has led to unplanned deficits and foreign debt.
Mexico's budget relies too heavily on fluctuating, impermanent oil revenues. Switzerland's public referendum system has helped restrain spending, but some Swiss cantons have unsustainable budgets.
Aging populations will prove challenging to budget stability in a number of states (Luxembourg, South Korea, Belgium, Netherlands, Spain, Turkey, UK). Luxembourg and South Korea have pursued conservative spending policies, but structural issues remain.
The United Kingdom's budgets have been near balance, if not in surplus. Insufficient planning in Iceland has led to unplanned deficits and foreign debt.
Mexico's budget relies too heavily on fluctuating, impermanent oil revenues. Switzerland's public referendum system has helped restrain spending, but some Swiss cantons have unsustainable budgets.
4.8
20
4.4
21
3.7
22
3.7
3.6
24
3.5
25
3.2
26
2.6
27
2.4
28
2.2
29
1.7
30
Debt and deficits are persistent problems for most of the countries in this group.
The EU member states included here (Slovakia, Czech Republic, Portugal, Greece, Germany, Poland, France, Hungary, Italy) all have had difficulties in staying below the Maastricht Treaty's 3 percent deficit threshold.
Several of these (Poland, France, Hungary, Italy) suffer from worsening structural deficits. Germany and Portugal, by contrast, have improved conditions, while Slovakia has remained fairly stable.
Greece, the United States and Japan all have medium-to-high public debts, and face serious pressure as a result of aging populations.
The EU member states included here (Slovakia, Czech Republic, Portugal, Greece, Germany, Poland, France, Hungary, Italy) all have had difficulties in staying below the Maastricht Treaty's 3 percent deficit threshold.
Several of these (Poland, France, Hungary, Italy) suffer from worsening structural deficits. Germany and Portugal, by contrast, have improved conditions, while Slovakia has remained fairly stable.
Greece, the United States and Japan all have medium-to-high public debts, and face serious pressure as a result of aging populations.
Rationale
A successful budgetary policy should be fiscally sustainable by enabling a government to pay its fiscal obligations (solvency), sustain economic growth, meet future obligations with existing tax levels (stable taxes) and pay current obligations without shifting the cost to future generations (intergenerational fairness).
The EU requires its members to meet certain additional criteria, such as keeping annual deficits under 3 percent of total spending.
Performance comparison
Use drop-down menus for selections. In all cases, higher scores reflect better performance.
