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Fiscal Management of Scaled-Up Aid

Author/Editor: Gupta, Sanjeev | Schwartz, Gerd | Tareq, Shamsuddin | Allen, Richard | Adenauer, Isabell | Fletcher, Kevin | Last, Duncan
Authorized for Distribution: September 1, 2007
Electronic Access: Free Full Text (PDF file size is 512KB)
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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 discusses the role of fiscal policy and fiscal institutions in managing scaled-up aid. In an environment of volatile scaled-up aid, fiscal policy formulation should be anchored in medium-term frameworks, incorporating a longer-term view of potential resource availability and spending plans. There is merit in smoothing expenditures over time so that all programs are adequately funded. The paper argues that wage-bill ceilings should be used in Fund-supported programs only in exceptional cases. The paper also discusses basic reforms for strengthening public financial management systems for effective utilization of scaled-up aid flows.
Series: Working Paper No. 07/222
Subject(s): Development assistance | Fiscal policy | Public finance | Government expenditures | Fund policies
Author's keyword(s): Foreign aid | expenditure policy | public financial management
    Published:   September 1, 2007        
            Format:   Paper
    Stock No:   WPIEA2007222   Pages:   64
    Price:   US$18.00
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