Institutional Dimensions of Fiscal Policy: Evidence from a Narrative Review
Keywords:
Fiscal Policy, National Accounting, Macroeconomic Stability, Transparency, Institutional Capacity, Public Finance ReformAbstract
Fiscal policy and national accounting are central to achieving macroeconomic stability and sustainable development. This narrative review explores how fiscal instruments and accounting standards influence economic outcomes, with a focus on transparency, institutional capacity, and policy implementation across different national contexts. Using systematic literature searches from Scopus and Google Scholar, the review includes peer-reviewed studies published within the last two decades that examine fiscal deficits, national accounting practices, and the effectiveness of fiscal incentives. Findings reveal that persistent fiscal deficits often lead to macroeconomic instability in developing countries, while developed nations utilize stronger institutions to manage fiscal cycles effectively. National accounting systems, particularly accrual-based models, significantly enhance fiscal transparency and public trust. However, challenges such as weak institutional capacity, lack of standardized accounting practices, and limited inter-agency coordination persist. Addressing these requires capacity-building, policy coherence, and participatory governance. The discussion highlights how systemic factors, such as fiscal politics and institutional design, shape policy outcomes. The review concludes by recommending reforms in fiscal management, enhanced transparency mechanisms, and interdisciplinary research into behavioral and technological dimensions of public finance. These strategies are crucial for enabling inclusive, responsive, and sustainable fiscal governance.
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