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There is relatively little literature that analyses the role, functions, and organization of finance ministries. The purpose of this working paper is to review international experiences in this area, in an effort to formulate guiding principles of organizational design and the allocation of functions, while recognizing the crucial importance of each country’s history and institutional context. Over the past 30 years many finance ministries have moved from a “traditional” to an “emerging” model of organizational design in which there is greater openness and transparency, more flexible management practices, and a broader focus on strategic policy issues. In addition, many operational functions have been devolved to arm’s–length agencies or line ministries. The paper describes the challenges facing developing countries in strengthening their finance ministries, and the principles, approaches, and strategies that can be applied.
This paper assesses the relative strengths and weaknesses of fiscal institutions in ten Southeastern European countries, using recent benchmarking methodologies developed by FAD. The assessment evaluates each country’s understanding of the scale of the fiscal adjustment challenge, its ability to develop a credible consolidation strategy, and its capacity to implement the strategy. Key institutional arrangements, are generally in place, including top-down budgeting and medium-term budget frameworks. Other institutional arrangements require further attention, including macro-fiscal forecasting, fiscal risk analysis, setting fiscal objectives, presence and role of independent fiscal agencies, and top-down parliamentary approval.
This paper presents twelve budget institutions that can support planning and delivery of credible fiscal strategies in the fiscal policy-making process. The resulting framework is applied to seven low-income countries and the status of their budget institutions compared to the G-20 advanced and emerging market economies. The paper then presents recommendations for designing and implementing appropriate fiscal strategy for low- income countries. Particular attention is paid to prioritization and sequencing of reform efforts.
Qatar has recently taken steps toward introducing a medium-term budget framework (MTBF) to enhance the predictability of spending decisions in the country. However, implementing medium-term fiscal planning requires formal procedural fiscal rules and parallel efforts to enhance the credibility of the annual budget. Given Qatar’s significant exposure to hydrocarbon price movements and its long-lasting hydrocarbon reserves, such fiscal rules would need a certain degree of flexibility and, at the same time, should be set to maintain consistency with long-term fiscal sustainability.
This paper is the third in a series assessing macroeconomic developments and prospects in low-income developing countries (LIDCs). The first of these papers (IMF, 2014a) examined trends during 2000–2014, a period of sustained strong growth across most LIDCs. The second paper (IMF, 2015a) focused on the impact of the drop in global commodity prices since mid-2014 on LIDCs—a story with losers (countries dependent on commodity exports, notably fuel) and winners (countries with a more diverse export base, where growth remained robust). The overarching theme in this paper’s assessment of the macroeconomic conjuncture among LIDCs is that of incomplete adjustment to the new world of “lower ...
This paper investigates how developments during and after the 2008–09 crisis have changed economists’ and policymakers’ views on: (i) fiscal risks and fiscal sustainability; (ii) the effectiveness of fiscal policy as a countercyclical tool; (iii) the appropriate design of fiscal adjustment programs; and (iv) the role of fiscal institutions.
This paper examines the institutional arrangements of the macro-fiscal function in 16 African countries. Most ministries of finance (MoFs) have established a macro-fiscal department or unit, but their functions, size, structure and outputs vary considerably. Based on a survey, we present data on staff size, functional scope and the forecasting performance of macro-fiscal departments and identify common challenges in the countries reviewed. Some MoFs perform many macro-fiscal functions, but actions of various kinds are needed to strengthen their macro-fiscal departments. This paper provides some guidance for policy-makers in the region for enhancing the quality and scope of macro-fiscal outputs.
Since the 1990s, private military and security companies (PMSCs) have intervened in civil wars around the globe. However, reports that such contractors have been responsible for human rights abuses have spurred the need to evaluate the industry's impact on conflicts. This book identifies two market forces that impact PMSCs' military effectiveness: local or conflict-level competition and global or industry-level competition. The book argues that competitive market pressure creates a strong monitoring system and that the company's corporate structure and external competitive environment in a given conflict help to explain the variance in accountability to clients. Including an analysis of data on international PMSCs' interventions in civil wars from 1990-2008, Seden Akcinaroglu and Elizabeth Radziszewski show the impact of competition on companies' contribution to the termination of different types of civil wars.
The extent of fiscal transparency in Western Europe has varied over the centuries. Although ancient Greek, Roman, and medieval governments were sometimes open about their finances, the absolute monarchies of the 1600s and 1700s shrouded them in mystery. Factors that have encouraged transparency include (i) the sharing of political power and rulers’ need to persuade creditors to lend and taxpayers’ representatives to approve new taxes; (ii) the spread of technological innovations that reduce the costs of storing and transmitting information; and (iii) the acceptance of political theories that emphasize accountable government and public discussion of government policy.
This Technical Assistance Report discusses the recommendations made by the IMF mission to assist Georgian authorities in enhancing country’s fiscal rules framework. It is recommended that the fiscal rules should consider both the overall objectives and the economic context in which they are applied. In Georgia, this would include: the stated primary objective of fiscal sustainability as well as the need for flexibility to respond to economic shocks; the transitional nature of the Georgian economy; and the intension to gradually move toward the European Union fiscal governance framework. It is also recommended that the fiscal policy targets should factor in potential economic shocks and fiscal risks.