{
  "title": "Evaluating Fiscal Rules for Lesotho: Kingdom of Lesotho",
  "publication": "Selected Issues Papers, December 6, 2022",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2022/12/07/evaluating-fiscal-rules-for-lesotho-kingdom-of-lesotho-526717",
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  "summary": "A key challenge for Lesotho is the downward rigidity in public expenditure—which increases when SACU transfers are buoyant but fails to be pared back when they fall.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- A key challenge for Lesotho is the downward rigidity in public expenditure—which increases when SACU transfers are buoyant but fails to be pared back when they fall.\n- Fiscal rules would be of value in Lesotho to:\n  - help provide constraints on spending and resist political pressure to overspend,\n  - embed fiscal responsibility within the country’s macro-fiscal framework, and\n  - ensure debt sustainability.\n- The paper evaluates options for fiscal rules for Lesotho, discusses the institutional framework required to help underpin a sound fiscal-rule framework, posits a possible fiscal-rule framework for Lesotho, and offers a roadmap to introduce the framework."
    },
    {
      "heading": "Institutional and design considerations",
      "content": "- Importance of an institutional framework to underpin fiscal rules, including mechanisms to enforce restraint when revenue (notably SACU transfers) is volatile.\n- Need to design rules that account for revenue volatility and avoid entrenching expenditure during periods of buoyant transfers."
    },
    {
      "heading": "Proposed fiscal-rule framework and roadmap (as described)",
      "content": "- The paper posits a possible fiscal-rule framework tailored to Lesotho’s context (details in the full paper).\n- Offers a roadmap to introduce the fiscal-rule framework, including sequencing and institutional prerequisites (details in the full paper).\n\n---\n\n Content in this bundle\n\n- Sipea2022001\n  - Sipea2022001 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2022001 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2022/12/07/evaluating-fiscal-rules-for-lesotho-kingdom-of-lesotho-526717"
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    "Authors: Yibin Mu",
    "Published: December 6, 2022",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400226014.018",
    "A key challenge for Lesotho is the downward rigidity in public expenditure—which increases when SACU transfers are buoyant but fails to be pared back when they fall.",
    "Fiscal rules would be of value in Lesotho to:",
    "The paper evaluates options for fiscal rules for Lesotho, discusses the institutional framework required to help underpin a sound fiscal-rule framework, posits a possible fiscal-rule framework for Lesotho, and offers a roadmap to introduce the framework.",
    "Importance of an institutional framework to underpin fiscal rules, including mechanisms to enforce restraint when revenue (notably SACU transfers) is volatile.",
    "Need to design rules that account for revenue volatility and avoid entrenching expenditure during periods of buoyant transfers.",
    "The paper posits a possible fiscal-rule framework tailored to Lesotho’s context (details in the full paper).",
    "Offers a roadmap to introduce the fiscal-rule framework, including sequencing and institutional prerequisites (details in the full paper).",
    "**Sipea2022001**"
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