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

ByAnnalisa Fedelino, Gerd Schwartz, Marijn Verhoeven

April 1, 2006

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.

Subject: Civil service reform, Expenditure, Government wage bill, Labor, Public sector wages, Wage adjustments, Wages

Keywords: aid scaling up, bill adjuster, bill ceiling, bill conditionality, bill PC, Central America, Civil service reform, Government wage bill, IMF conditionality, MDGs, Public sector wages, Sub-Saharan Africa, Wage adjustments, wage bill, Wages, WP

Pages:
37
Volume:
2006
DOI:
https://doi.org/10.5089/9781451863666.001
Issue:
106
Series:
Working Paper No. 2006/106
Stock No:
WPIEA2006106
ISBN:
9781451863666
ISSN:
1018-5941

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