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Preamble

All human rights require resources for their realization. In order to guarantee rights, States must have solid institutions that mobilize, allocate, and utilize sufficient public resources in ways that are transparent, participatory, and responsible. This must be done in compliance with the principles established in the Universal Declaration of Human Rights and the norms included in the main international and regional human rights treaties, in addition to national legal frameworks, in particular national constitutions.

Fiscal policy, understood as the set of policies for managing public spending and revenue generation, comprises all the techniques whereby States acquire and allocate resources, including taxation, public debt, income from public companies, macro-fiscal planning and all the processes associated with the budgetary cycle. The main phases of fiscal policy are characterized by the generation and mobilization of resources, allocation and execution of resources, and the monitoring of fiscal policy.

Fiscal policy must be understood as an instrument for guaranteeing civil, political, economic, social, cultural, and environmental rights, and it has an enormous transformative potential for combatting poverty, inequalities, (including gender), power asymmetries and other structural factors that hinder the full realization of these rights. A fiscal policy that distributes revenue and wealth equitably by confronting inequality can reduce polarization, marginalization, and social discontent. Public spending also helps to provide public services that reduce socioeconomic inequalities. Decision making related to taxation and budgets, moreover, should involve more direct and participatory democracy.

Fiscal policy defines the availability, distribution, and usage of resources required by States to guarantee human rights and thus comply with the 2030 Sustainable Development Agenda, including the commitments to “realize the human rights of all,” guaranteeing a safety net of universal social protection, and confronting other global challenges, such as climate change.

The task of aligning fiscal policies with human rights requires clear standards. Human rights principles underpin the key functions of fiscal policy and are completely applicable to the substantive content of fiscal policy, as well as its procedural aspects. International human rights law is a binding framework for States, serving as a guide to implement more legitimate and equitable fiscal policies, and to resolve the injustices arising from the allocation of public resources. This framework also generates specific responsibilities for corporations, international financial institutions, and other non-state and intergovernmental actors who must respect and contribute to the realization of rights.

As with other areas of public financing, fiscal policy is subject to an emerging set of norms, regulations and standards complementary to human rights. This growing complexity-and the increasing disciplinary specialization involved-sometimes leads to fiscal policy being viewed as a fundamentally technical matter which should be handled by specialized institutions, thus obscuring its direct impact on the lives and well-being of people and communities.

Fiscal policy is a human rights matter and, therefore, the rules and complementary standards governing fiscal policy must be interpreted through the lens of human rights and domestic constitutional norms that reflect the social contract. The scope of the rights enshrined in the social contract should not have to adjust to prevailing fiscal policy, but rather the latter must be at the service of the former.

The classical functions of fiscal policy-stabilizing the economy and distributing and allocating resources-are not incompatible with the objective of guaranteeing human rights. On the contrary, fiscal and economic prudence and the fulfillment of human rights obligations are not mutually exclusive, given that both focus on the importance of measures carefully designed to avoid negative effects on people. Nevertheless, owing to both design and implementation aspects, prevailing fiscal policies, and specifically so-called austerity programs (“fiscal consolidation” or “structural adjustment”), have often created risks for human rights, directly and indirectly, by undermining the capacities of States to respect, protect, and guarantee those rights. 

Responsibly managed fiscal policy that ensures both the sustainable management of public finances and respect for the international human rights obligations of States, is a basic condition for guaranteeing collective well-being and legitimate democracy. The following Principles and Guidelines on Human Rights and Fiscal Policy provide a framework for designing and implementing fiscal policies that will definitively advance the guaranteeing of rights, while preserving sustainable public finances and actively addressing political dilemmas.

ACIJ- Asociacion Civil por la Igualdad y la Justicia
CELS-Centro de Estudios Legales y Sociales
CESR-Center For Economic and Social Rights
Dejusticia-Derecho Justicia Sociedad
Fundar-Centro de Análisis e Investigación
Inesc
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Principles of Human Rights in Fiscal Policy. ©2022