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Fiscal Management of Scaled-Up Aid

  • Sanjeev Gupta
  • Duncan Last
  • Isabell Adenauer
  • Kevin Fletcher
  • Gerd Schwartz
  • Shamsuddin Tareq
  • Richard Allen
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    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.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/222.

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    Length: 64
    Date of creation: 01 Sep 2007
    Date of revision:
    Handle: RePEc:imf:imfwpa:07/222
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