SHOULD SOUTH AFRICA ADOPT NUMERICAL FISCAL RULES?

The purpose of this article is to stimulate debate on the potential of numerical fiscal rules at the national-government level in South Africa. In section 1, we introduce the rules-versus-discretion debate and summarise the practical shortcomings of discretionary regimes. Section 2 outlines options for reforms. Section 3 draws on theory and case studies to compare the effectiveness of numerical fiscalrules and the accountability-enhancing fiscal reforms that are being implemented in South Africa. Against this background, an answer is offered to the question whether or not South Africa should adopt numerical fiscal rules in section 4. The major conclusion is that the adopton of numerical rules is more likely to do harm than to improve fiscal policymaking in South Africa.