Prioritizing Expenditures for a Recovery for All: A Rapid Review of Public Expenditures in 126 Developing

Isabel Ortiz, Jingqing Chai, Matthew Cummins and Gabriel Vergara
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Jingqing Chai: Division of Policy and Practice,UNICEF
Gabriel Vergara: Division of Policy and Practice,UNICEF

Working papers from UNICEF,Division of Policy and Strategy

Abstract: This working paper examines the extent to which fiscal consolidation is occuring in 2010-11 among 126 low and middle-income countries, and the potential risks for children and poor households at a time when economic recovery is fragile and uneven. Using fiscal projection data published by the IMF, the paper finds that a significant number of countries is expected to contract aggregate government spending in 2010-11. This is of concern both in terms of GDP (44% of the sample is tightening) as well as in the real value of total government expenditures (25% of the countries). The paper identifies common adjustment measures considered by policy makers, such as wage bill cuts/caps, reducing subsidies and targeting social protection, and highlights their potentially negative social impacts. Financing options for equitable social spending are explored. The paper concludes by questioning if the projected fiscal adjustment trajectory in a number of countries -- in terms of timing, scope and pace -- is conducive to adequately protecting vulnerable households and achieving development goals such as the MDGs.

Keywords: fiscal consolidation; public expenditures; social spending; crisis recovery; poverty; wage bill; food subsidies; social protection (search for similar items in EconPapers)
JEL-codes: H12 H5 I3 J3 O23 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2010
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Citations: View citations in EconPapers (3)

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