By contrast, fiscal policy has strong allocation and redistribution dimensions, which need to reflect national political preferences. Accordingly, fiscal policy has remained the innate prerogative of democratically elected governments.
This is supported by the findings of the political-economy literature, which points to the need for limits on the delegation of these policies to independent experts.6 Proposals have been made to set up independent fiscal agencies with a clearly defined and limited role, such as deciding on the overall fiscal balance, and then leaving it to the political system to decide on taxes and expenditures7, but they have not gained much traction.