Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania

 
Author/Editor: Ter-Minassian, Teresa ; Hughes, Richard ; Hajdenberg, Alejandro
 
Publication Date: November 01, 2008
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: A common dilemma facing governments around the world is how to meet the sizeable fiscal costs of providing and maintaining infrastructure networks. Over the past decade, developed and developing countries have looked to fiscal rules, budgetary reforms, tax policy and administration measures, public-private partnerships and other innovative financial instruments to raise additional finance for infrastructure investment. This paper looks at the range of options for raising the financing to meet Tanzania's infrastructure needs. It begins with a brief survey of the evidence on the relationship between infrastructure, public investment, and economic growth, and then goes on to consider the case for additional infrastructure investment in Tanzania. The second part of the paper looks at five broad options for mobilizing additional resources to meet Tanzania's infrastructure needs: (i) direct private investment and PPPs, (ii) expenditure reprioritization and efficiency, (iii) domestic revenue mobilization, (iv) external grants and concessional financing, and (v) sovereign borrowing on domestic or international credit markets. The paper concludes with some general recommendations on what combination of the above approaches might be suitable for Tanzania.
 
Series: Working Paper No. 08/256
Subject(s): Infrastructure | Tanzania | Fiscal policy | Private investment | Public investment programs | Tax policy | Revenue mobilization | Credit policy | Bonds

Author's Keyword(s): Tanzania | fiscal space | infrastructure | sovereign bonds
 
English
Publication Date: November 01, 2008
Format: Paper
Stock No: WPIEA2008256 Pages: 41
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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