IMF Fiscal Affairs E-Newsletter
Fiscal Affairs Department (FAD) - March 2014
IMF Working Papers
"Foreign Investor Flows and Sovereign Bond Yields in Advanced Economies" by Serkan Arslanalp and Tigran Poghosyan; Working Paper WP/14/27.
"Sub-National Credit Risk and Sovereign Bailouts: Who Pays the Premium?" by Eva Jenkner and Zhongjin Lu; Working Paper WP/14/20.
"A Hybrid Approach to Estimating the Efficiency of Public Spending on Education in Emerging and Developing Economies" by Francesco Grigoli; Working Paper WP/14/19.
"The Quest for Non-Resource-Based FDI: Do Taxes Matter?" by Tidiane Kinda; Working Paper WP/14/15.
"Resource Blessing, Revenue Curse? Domestic Revenue Effort in Resource-Rich Countries" by Ernesto Crivelli and Sanjeev Gupta; Working Paper WP/14/5.
"Understanding Countries’ Tax Effort" by Ricardo Fenochietto and Carolina Pessino; Working Paper WP/13/244
"Debt Reduction, Fiscal Adjustment, and Growth in Credit-Constrained Economies" by Emanuele Baldacci, Sanjeev Gupta, and Carlos Mulas-Granados; Working Paper WP/13/238.
"Energy Subsidies: How Large Are They and How Can They Be Reformed?" by Benedict Clements, David Coady, Stefania Fabrizio, Sanjeev Gupta, and Baoping Shang; Economics of Energy & Environmental Policy, Vol. 3, February 2014.
“Growth and the Importance of Sequencing Debt Reductions across Sectors" by Fabian Bornhorst and Marta Ruiz-Arranz; Chapter 2, Jobs and Growth: Supporting the European Recovery, IMF, January 2014.
“Reducing Public Debt When Growth Is Slow.“ by S. Ali Abbas, Bernardin Akitoby, Jochen Andritzky, Helge Berger, Takuji Komatsuzaki, and Justin Tyson; Chapter 4, Jobs and Growth: Supporting the European Recovery, IMF, January 2014.
"Bond Yields in Emerging Economies: It Matters What State You Are In" by Laura Jaramillo and Anke Weber; Emerging Markets Review, Vol. 17, December 2013.
“Planes, Ships and Taxes: Charging for International Aviation and Maritime Emissions” by Michael Keen, Ian Parry and Jon Strand; Economic Policy, Vol. 28, November 2013.
"Efficiency-Adjusted Public Capital and Growth" by Sanjeev Gupta, Alvar Kangur, Chris Papageorgiou, Abdoul Wane; World Development, Vol. 57, May 2014.
"How Effective Is Fiscal Policy Response in Financial Crises?" by Emanuele Baldacci, Sanjeev Gupta, Carlos Mulas-Granados; Chapter 14, Financial Crises: Causes, Consequences, and Policy Responses, edited by Claessens, Laeven, Kose, and Valencia, IMF, February 19, 2014.
"Foreign Aid and Revenue: Still a Crowding-Out Effect? by Dora Benedek, Ernesto Crivelli, Sanjeev Gupta, and Priscilla Muthoora; Public Finance Analysis Vol. 70, March 2014.
FAD Launches New Tax Administration Diagnostic Tool
On February 4, 2014, IMF Deputy Managing Director Nemat Shafik launched TADAT – the Tax Administration Diagnostic Assessment Tool. TADAT was developed by the IMF’s Fiscal Affairs Department with strong support from the tax, development, and donor communities. TADAT is a diagnostic tool to assess tax administration performance. It provides an assessment baseline that can be used to determine reform priorities, and, with subsequent repeat assessments, highlight reform achievements. TADAT is, by design, the tax-side analogue of the well-established PEFA (Public Expenditure and Financial Accountability) framework. Assessments will be carried out by a range of organizations with trained and accredited evaluators. TADAT will be overseen by a small secretariat, financed through donor support, which is being established within the IMF’s Fiscal Affairs Department.
FAD Co-Hosts High Level Seminar on Fiscal Reforms in China - January 13-14, 2014
FAD and the Chinese Ministry of Finance organized a successful seminar on fiscal reforms for senior Chinese policymakers and officials from the Ministry of Finance, the People’s Bank of China, National Audit Office, senior academics, and provincial finance bureaus. Finance Minister Lou Jiwei and IMF First Deputy Managing Director David Lipton provided the opening addresses. Minister Lou highlighted the main budget institutional reforms agreed on by the Chinese Government: including the introduction of a medium-term orientation to budgeting, a new regulatory framework for local government borrowing, and a modernized accounting system to monitor liabilities and contingent liabilities, especially of Local Government Financing Vehicles. FAD has been asked by the Ministry to support these reforms in the coming years. FDMD Lipton highlighted the need for a new growth model for the Chinese economy focused on domestic consumption, environmental protection, and sustainable growth.
Fifth International Tax Dialogue Global Conference - Marrakesh, Morocco, December 3-5, 2013
The topic of this year’s International Tax Dialogue was “Tax and Intergovernmental Relations", covering policy and administrative aspects of sub-national taxation, as well as regional tax issues. The ITD is a consortium of international organizations, including the IMF. The IMF was the Chair of the ITD Steering Group for 2013, and Deputy Managing Director Shafik opened the conference. FAD Acting Director Sanjeev Gupta spoke in a plenary session on fiscal risks and intergovernmental fiscal relations, as well as in the closing panel. This year’s event achieved record attendance, by over 350 senior tax officials from more than 90 countries. FAD will later this year publish a book on fiscal lessons from federations for regional economic unions. Many perspectives were presented in the conference, including from sub-national tax administrations and regional groups as well as national ministries of finance and revenue administrations. The conference also saw the launch of a publication bringing together the background papers from previous ITD conferences.
FAD Strengthens TA Cooperation with the European Commission
FAD has been strengthening cooperation with the European Commission (EC) on Southeast Europe. A contribution agreement with the EC’s Directorate General for Enlargement was signed recently and covers priority technical assistance (TA) needs for Albania. Combined with internal resources and external financial support from Japan, EC financing has allowed FAD to respond flexibly to TA requests by the Albanian authorities. In tax administration, FAD is helping with the implementation of a new IT system for core operations, which includes the redesign of all main business processes. The project is expected to generate significant administrative improvements and result in both better taxpayer services and tax compliance. In public financial management, FAD has quantified the outstanding stock of payment arrears and is working with the government to implement a credible clearance strategy. Future reform efforts will focus on budget planning; expenditure controls and reporting; and mitigating fiscal risks.
FAD Unveils Template on Fiscal Frameworks for Resource-Rich Developing Countries
Two key issues in RRDCs are (i) consumption versus saving/investment, and (ii) the uncertainty and volatility of resource revenue. A recent Paper offers a new fiscal framework within which such issues can be analyzed. In particular, the new framework goes beyond the traditional Permanent Income Hypothesis, allowing for example for the possibility of frontloading public investment. Since the paper was issued in Fall 2012, an FAD team has worked to operationalize it and has recently launched a new resource website containing background papers and a new excel-based template for assessing how fiscal rules can insulate the budget from the high volatility of fiscal revenue while maintaining fiscal sustainability. To facilitate its use, the Excel template is accompanied by a guidance note. The tool has already been used by about 20 country teams.
Fiscal Management of Oil and Natural Gas in East Africa, East African Community and IMF Workshop - Arusha, Tanzania, January 15-17, 2014
Regional cooperation and exchanges on oil and gas fiscal issues were the watchwords at this lively and well-attended workshop for the member states of the East African Community, co-hosted by the EAC at its headquarters in Arusha. More than 70 participants from all five member states gathered for a packed three-day agenda, with Kenya, Uganda, and Tanzania sending ministerial representatives to deliver keynote or concluding addresses. The workshop was opened by the EAC Secretary-General - Dr Richard Sezibera. The workshop covered fiscal regime design for oil and gas; revenue assessment and collection; macro-fiscal frameworks; public financial management; and regional fiscal dimensions (including harmonization and cross-border infrastructure). IMF staff came from FAD and AFR, with independent experts from within the East African region, Ghana, and the World Bank. The workshop was supported by the IMF’s Topical Trust Fund on Managing Natural Resource Wealth.
Public Finances and Pro-growth Fiscal Policy Conference - Santiago, Chile, January 20-21, 2014
FAD Acting Director Sanjeev Gupta gave a presentation at the 26th Regional Seminar on Fiscal Policy hosted by the Executive Secretariat of the Economic Commission of Latin America and the Caribbean (ECLAC). He presented the global fiscal outlook and its implication for Latin America. He emphasized that it will be important that the region continues to improve revenue mobilization and prioritize spending, particularly in infrastructure and social assistance to support growth and address the growing demand for public services and the relatively high income inequality.
FAD in the News
Setting Out The Store - The Economist.
"Once And For All—Why Capital Levies Are Not The Answer" by Michael Keen, iMFdirect.
"Revenue Sources and Cost Containment." Symposium Launch of the Report on “Global Health 2035: A World Converging within a Generation” by The Lancet Commission on Investing in Health.
"Fiscal Risk Sharing and Transfers: Lessons from International Experience", ITD Global Conference, 3-5 December 2013, Marrakesh.
"The Redistributive Role of Fiscal Policy: Latin America and the Rest of the World", Public Finance Workshop 2014, hosted by CEPAL, on January 22, Santiago, Chile.
IMF Fiscal Forum, April 8, 2014, IMF Headquarters, Washington DC.
FAD seeks talented professionals with a background in public finance, to work on macro-fiscal policy issues and to provide technical assistance advice to IMF member countries on PFM, tax reform, revenue administration, and different expenditure policy issues. Vacancies in FAD for staff and long-term expert positions are posted here. FAD also seeks experts who are interested in occasional short-term (2–3 week) assignments. Interested candidates may send their CVs here.
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