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

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Author Info
Annalisa Fedelino
Gerd Schwartz
Marijn Verhoeven
Abstract

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.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/106.

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Length: 37 pages
Date of creation: 08 May 2006
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Handle: RePEc:imf:imfwpa:06/106

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Related research
Keywords: IMF conditionality ; aid scaling up ; wage bill ; MDGs ; Conditionality ; Development assistance ; Wage restraint ; Millennium Development Goals ; Fiscal policy ; Government expenditures ; Wages ; Labor costs ; Labor markets ; Fund role ; Poverty Reduction and Growth Facility ;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Yongzheng Yang & Sanjeev Gupta & Robert Powell, 2005. "The Macroeconomic Challenges of Scaling Up Aid to Africa," IMF Working Papers 05/179, International Monetary Fund. [Downloadable!]
  2. Peter S. Heller, 2005. "Pity the Finance Minister: Issues in Managing a Substantial Scaling-Up of Aid Flows," IMF Working Papers 05/180, International Monetary Fund. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Degol Hailu, 2007. "Scaling-up HIV/AIDS Financing and the Role of Macroeconomic Policies in Kenya," Conference Paper 4, International Policy Centre for Inclusive Growth. [Downloadable!]
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This page was last updated on 2009-12-17.

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