Fiscal Management of Scaled-Up Aid

Sanjeev Gupta, Duncan Last, Isabell Adenauer, Kevin Fletcher, Gerd Schwartz, Shamsuddin Tareq and Richard Allen

No 2007/222, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; annual budget; country authorities; PFM system; fiscal policy; accounting system (search for similar items in EconPapers)
Pages: 64
Date: 2007-09-01
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Citations: View citations in EconPapers (3)

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