Making fiscal space happen
Subtitle: managing fiscal policy in a world of scaled-up aid
By: prepared by Peter S. Heller ... [et al.].
Contributors: Heller, Peter S.; International Monetary Fund. Fiscal Affairs Dept.
Series: IMF working paper -- WP/06/270
Publisher: International Monetary Fund, Fiscal Affairs Dept.
Published: 2006
Place of publication: [Washington, D.C.]
Language: eng
Number of pages: 53
Subjects: Fiscal policy -- Developing countries.; Economic assistance -- Developing countries.; Developing countries -- Economic policy.; Developing countries -- Economic conditions.
Description: Debt relief and the scaling up of aid to low-income countries should allow for greater fiscal space for expenditure programs to create long-term growth and lower poverty rates. But designing a suitable medium-term fiscal framework that fosters a sustainable delivery of better public services and infrastructure while maintaining a credible commitment to fiscal prudence confronts many challenges. This paper discusses what low-income countries can do to shape fiscal policy frameworks that are ambitious in trying to absorb additional aid while still ensuring longer-term sustainability for government expenditure programs and finances. It suggests what approaches can be used to manage the greater fiscal policy risks associated with a scaled-up aid environment, including coordination with monetary policy. The paper also discusses what institutional changes are needed if donors and countries are to facilitate the implementation of a higher level of aid-financed spending programs.
Notes: Caption title.

"December 2006."

Includes bibliographical reference (p. 45-47).

Also available on the World Wide Web.