Fiscal Management of Scaled-Up Aid
IMF Special Issues, April 22, 2008
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- Fiscal Management of Scaled-Up Aid
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Bibliographic details
- Authors: Kevin Fletcher, Sanjeev Gupta, Duncan P Last, Gerd Schwartz, Shamsuddin Tareq, Richard I Allen, Isabell Adenauer
- Published: April 22, 2008
- Series: IMF Special Issues
- DOI: https://doi.org/10.5089/9781589067035.058
Overview
- The international community has committed to scaling up aid and improving aid delivery to low-income countries to help them meet the Millennium Development Goals.
- Other "emerging" donors, public and private, are increasing their assistance, and debt-relief initiatives are creating space for new borrowing.
- Remittances to low-income countries have been on a precipitous rise, and many countries are benefiting from high commodity prices.
- The paper explores approaches to the sound fiscal management required to ensure effective and sustainable use of these flows, with a medium-term perspective and efficient use of resources in mind.
- Drawing on IMF Fiscal Affairs Department technical assistance to member countries, it outlines factors to take into account in preparing an action plan for public financial management reform and proposes specific measures to assist countries in strengthening fiscal institutions.
Key findings and analytical focus
- Scaled-up aid and other inflows (emerging donor assistance, remittances, high commodity prices, and debt-relief–enabled borrowing) create both opportunities and risks for fiscal policy.
- Effective use of increased resources requires a medium-term fiscal perspective and attention to public financial management (PFM) systems.
- The paper addresses questions that shape fiscal policy response to scaled-up aid, informed by IMF technical assistance experience.
Policy recommendations and proposed measures
- Prepare an action plan for public financial management reform that reflects the factors outlined in the paper.
- Strengthen fiscal institutions to ensure effective and sustainable use of scaled-up aid and other increased flows.
- Emphasize medium-term fiscal planning and efficient use of resources when integrating aid and other external inflows into fiscal frameworks.
Subjects and keywords (as listed)
- Aid flows; Budget planning and preparation; Expenditure; Fiscal accounting and reporting; Foreign aid; Health; Health care spending; Public debt; Public financial management (PFM).
- Keywords: Africa, Aid flows, aid predictability, aid volatility, Budget planning and preparation, country, expenditure plan, Fiscal accounting and reporting, ISI, PFM system, revenue, revenue administration reform, SI, Sub-Saharan Africa.
Content in this bundle
- Fiscal Management of Scaled-Up Aid -- chapter 1; IMF 2008.