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Aid Scaling Up: Do Wage Bill Ceilings Stand in the Way?

Author/Editor: Fedelino, Annalisa | Schwartz, Gerd | Verhoeven, Marijn
Authorized for Distribution: April 1, 2006
Electronic Access: Free Full Text (PDF file size is 519KB)
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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: This paper assesses whether the scaling up of aid and the resulting increase in government spending that is needed to meet the Millennium Development Goals (MDGs) would be hampered by wage bill ceilings that are often part of government programs supported by the IMF's Poverty Reduction and Growth Facility (PRGF). Based on country case studies for 2003-05, the paper suggests that, in the past, wage bill ceilings have not restricted the use of available donor funds. Yet the paper offers a number of suggestions for further enhancing the flexibility of wage bill conditionality in PRGF-supported programs to respond to higher aid flows that may result in the future.
Series: Working Paper No. 06/106
Subject(s): Conditionality | Development assistance | Wage restraint | Millennium Development Goals | Fiscal policy | Government expenditures | Wages | Labor costs | Labor markets | Fund role | Poverty Reduction and Growth Facility
Author's keyword(s): IMF conditionality | aid scaling up | wage bill | MDGs
    Published:   April 1, 2006        
    ISBN/ISSN:   0 / 1934-7073   Format:   Paper
    Stock No:   WPIEA2006106   Pages:   37
    Price:   US$15.00
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