Fiscal Rules Alone Are Not Enough to Rein in Government Debt

Northern Trust /

15-07-2026

Northern Trust's Weekly Economic Commentary examines why fiscal rules frequently fail to restrain public borrowing, while also assessing Mexico's evolving trade relationship with the U.S. and the growing infrastructure constraints facing artificial intelligence.

More than 120 countries now operate under fiscal rules, yet governments comply with them only around 60% of the time, leaving bond markets—not legislation—as the primary source of fiscal discipline.
The report argues that Mexico's cooperation on migration and narcotics has not translated into trade concessions, leaving uncertainty around future USMCA negotiations and investment.
Rapid AI adoption is increasingly constrained by resistance to new data centres, as permitting delays, power demand and water usage emerge as important bottlenecks to future compute capacity.

Read the full commentary for deeper insights into fiscal sustainability, global trade and AI infrastructure challenges.