The role of the treasury in the implementation of fiscal policy in Malta

Abstract

The term fiscal policy refers to the use of public finance instruments to influence the working of the economic system to maximize economic welfare. However, this is too vague a concept to be the focus of specific policy measures. For this reason, policy makers concentrate on more specific objectives, such as reduction of the rate of inflation, acceleration of the rate of growth, and redistribution of income. The activities of the public finance authorities are generally classified under four broad functions: allocation of resources, redistribution of income, stabilization of the economy, and the promotion of economic growth. The pursuit of these objectives is the implementation of fiscal policy. The Treasury is one of the major institutions involved in financial management of all fiscal operations. This thesis shall define this role, in the context of fiscal policy of the last three decades, and the organizational setup of Government in Malta.