INTRODUCTION
Persistent and widespread evidence of fiscal indiscipline has prompted a debate on the likely distortions causing such behavior and on effective ways to improve policy makers incentives .Among them ,institutional arrangements-ranging from legally binding fiscal rules to formal commitments supported by strong accountability mechanisms and procedural arrangements –have received considerable attention .
The underlying idea is that well designed institutions effectively discourage deviations from desirable policies .Yet the significance of the role of institutions in improving policy makers has been the subject. This issue revolves around the extent to which institutions themselves can alter the motivations of policy makers’ .In this course it provides a formal assessment of the role of fiscal institutions in improving fiscal discipline and explores some empirical implications of the analysis.