The Scottish Fiscal Framework: Past, Present, and Future

Fiscal rules for devolved nations present some fundamental challenges not faced when making national fiscal Rules. Most importantly, rules across devolved nations involve a negotiation between the central and devolved governments who have very different objectives and so the framework created ends up as a mix of economics, politics and the vagaries of compromise. This article highlights how these issues have resulted in Scotland finances being heavily influenced by both inflation and population growth in ways that were never intended to become a long run feature of the funding framework.