Fiscal Rules Public Investment And Growth

Author : Luis Serven
Publisher : World Bank Publications
Page : 36 pages
File Size : 41,6 Mb
Release : 2007
Category : Access to Finance
ISBN : 8210379456XXX

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Fiscal Rules, Public Investment, and Growth by Luis Serven Pdf

Abstract: Solvency is an intertemporal concept, relating to the present value of revenues and expenditures, and encompassing both assets and liabilities. But the standard practice among policy makers, financial market participants and international financial institutions is to assess the strength of the fiscal accounts solely on the basis of the cash deficit. Short-term cash flows matter, but a preponderant focus on them can encourage governments to invest too little, especially during episodes of fiscal tightening. This has potentially adverse consequences for growth and, paradoxically, even for fiscal solvency itself. The paper offers an overview of the links between fiscal targets, public investment, and public sector solvency. After reviewing the international experience with public investment under fiscal adjustment, the paper lays out an analytical framework to illustrate the consequences of using the public deficit as a guide to solvency. The paper then discusses some alternatives to conventional cash deficit rules and their implications for investment and fiscal solvency.

Author : Massimo Florio
Publisher : Edward Elgar Publishing
Page : 329 pages
File Size : 50,5 Mb
Release : 2011-01-01
Category : Business & Economics
ISBN : 9781849804776

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Public Investment, Growth and Fiscal Constraints by Massimo Florio Pdf

This book makes a unique contribution in advancing understanding of the fiscal condition and growth potential of the New Member States of the European Union. It provides new data, policy evaluation, and offers national and regional perspectives. The core research questions are the effect of public investment in the context of macroeconomic disequilibrium and how it is possible to finance capital accumulation in the present and future conditions of mounting public sector debt. The contributors reveal that there is now a convincing case for public investment as an essential driver of convergence and growth in Europe. However, a new international and inter-generational fiscal pact to frame a more optimistic view of the role of government is needed. This book explores how public investment matters for growth, how fiscal conditions may support investment, and the role EU regional policy can have in terms of structural change and investment needs. Public Investment, Growth and Fiscal Constraints provides new data analyses on the EU New Member States in Central and Eastern Europe making it an essential tool for academics, students and practitioners interested in public finance and European Economics. The structural and public finance issues in these former transition economies raised in this book will also strongly appeal to policymakers, officials and consultants. The book is based on an independent research project of the University of Milan, supported by the European Investment Bank.

Author : Jack M. Mintz,Michael Smart
Publisher : World Bank Publications
Page : 32 pages
File Size : 47,8 Mb
Release : 2006
Category : Capital budget
ISBN : 8210379456XXX

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Incentives for Public Investment Under Fiscal Rules by Jack M. Mintz,Michael Smart Pdf

The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about electoral prospects would favor expenditures providing immediate benefits to their voters. An alternative budgetary approach is to separate capital from current revenues and expenditures and relax fiscal constraints by allowing governments to finance capital expenditures with debt, as suggested by the golden rule approach to capital funding. But the effect of capital budgeting would be to provide opportunities to politicians to escape the fiscal rule constraints by shifting current expenditures into capital accounts that are difficult to measure properly, thereby leading to increased borrowing. As an alternative, the authors propose a modified golden rule limiting debt finance to a proportion of the government's investment in self-liquidating assets.

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
Page : 49 pages
File Size : 44,9 Mb
Release : 2005-01-04
Category : Business & Economics
ISBN : 9781498331630

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Public Investment and Fiscal Policy - Lessons From the Pilot Country Studies by International Monetary Fund. Fiscal Affairs Dept. Pdf

This paper reports on findings from eight pilot country studies on public investment that were carried out during the second half of 2004. The pilot country studies covered a diverse group of countries. Specifically, they included countries in Latin America (Brazil, Chile, Colombia, and Peru), Africa (Ethiopia and Ghana), the Middle East (Jordan), and Asia (India).

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
Page : 73 pages
File Size : 46,7 Mb
Release : 2009-12-11
Category : Business & Economics
ISBN : 9781498335164

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Fiscal Rules—Anchoring Expectations for Sustainable Public Finances by International Monetary Fund. Fiscal Affairs Dept. Pdf

The sharp increase in fiscal deficits and public debt in most advanced and several developing economies has raised concerns about the sustainability of public finances and highlighted the need for a significant adjustment over the medium term. This paper assesses the usefulness of fiscal rules in supporting fiscal consolidation, discusses the design and implementation of rules based on a new data base spanning the whole Fund membership, and explores the fiscal framework that could be adopted as countries emerge from the crisis.

Author : Mr. Abdul Abiad,Davide Furceri,Petia Topalova
Publisher : International Monetary Fund
Page : 26 pages
File Size : 51,9 Mb
Release : 2015-05-04
Category : Business & Economics
ISBN : 9781484361559

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The Macroeconomic Effects of Public Investment by Mr. Abdul Abiad,Davide Furceri,Petia Topalova Pdf

This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment in a sample of 17 OECD economies since 1985 and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.

Author : Mr.Gerd Schwartz,Ms.Manal Fouad,Mr.Torben S Hansen,Ms.Genevieve Verdier
Publisher : International Monetary Fund
Page : 344 pages
File Size : 48,9 Mb
Release : 2020-09-03
Category : Business & Economics
ISBN : 9781513511818

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Well Spent by Mr.Gerd Schwartz,Ms.Manal Fouad,Mr.Torben S Hansen,Ms.Genevieve Verdier Pdf

Drawing on the Fund’s analytical and capacity development work, including Public Investment Management Assessments (PIMAs) carried out in more than 60 countries, the new book Well Spent: How Strong Infrastructure Governance Can End Waste in Public Investment will address how countries can attain quality infrastructure outcomes through better infrastructure governance—an issue becoming increasingly important in the context of the Great Lockdown and its economic consequences. It covers critical issues such as infrastructure investment and Sustainable Development Goals, controlling corruption, managing fiscal risks, integrating planning and budgeting, and identifying best practices in project appraisal and selection. It also covers emerging areas in infrastructure governance, such as maintaining and managing public infrastructure assets and building resilience against climate change.

Author : William Easterly
Publisher : World Bank Publications
Page : 38 pages
File Size : 53,7 Mb
Release : 2007
Category : Accounting
ISBN : 8210379456XXX

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Walking up the down escalator : public investment and fiscal stability by William Easterly Pdf

Abstract: Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a preponderant focus on them encourages governments to invest too little. Cash flow targets also encourage governments to shift investment spending off budget, by seeking private investment in public projects-irrespective of its real fiscal or economic benefits. To evade the action of cash flow targets, some have suggested excluding from their scope certain investments (such as those undertaken by public enterprises deemed commercial or financed by multilaterals). These stopgap remedies might sometimes help protect investment, but they do not provide a satisfactory solution to the underlying problem. Governments can more effectively reduce the biases created by the focus on short-term cash flows by developing indicators of the long-term fiscal effects of their decisions, including accounting and economic measures of net worth, and where appropriate including such measures in fiscal targets or even fiscal rules, replacing the exclusive focus on liquidity and debt.

Author : Till Cordes,Mr.Tidiane Kinda,Ms.Priscilla S. Muthoora,Anke Weber
Publisher : International Monetary Fund
Page : 29 pages
File Size : 40,5 Mb
Release : 2015-02-12
Category : Business & Economics
ISBN : 9781498343312

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Expenditure Rules by Till Cordes,Mr.Tidiane Kinda,Ms.Priscilla S. Muthoora,Anke Weber Pdf

This paper provides new evidence on the effectiveness of expenditure rules. The analysis is based on a unique dataset covering all countries with national and supranational fiscal rules, including 33 expenditure rules, between 1985 and 2013. It contributes to the existing literature on fiscal rules in two main ways. First, it is the most comprehensive assessment of compliance with rules and of the potential role of expenditure rules, in particular regarding long-term sustainability. Second, it analyzes whether expenditure rules are associated with changes in public investment and its efficiency.

Author : Jack M. Mintz,Michael Smart
Publisher : Unknown
Page : 128 pages
File Size : 54,6 Mb
Release : 2012
Category : Electronic
ISBN : OCLC:931673437

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Incentives for Public Investment Under Fiscal Rules by Jack M. Mintz,Michael Smart Pdf

The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about electoral prospects would favor expenditures providing immediate benefits to their voters. An alternative budgetary approach is to separate capital from current revenues and expenditures and relax fiscal constraints by allowing governments to finance capital expenditures with debt, as suggested by the golden rule approach to capital funding. But the effect of capital budgeting would be to provide opportunities to politicians to escape the fiscal rule constraints by shifting current expenditures into capital accounts that are difficult to measure properly, thereby leading to increased borrowing. As an alternative, the authors propose a modified golden rule limiting debt finance to a proportion of the government's investment in self-liquidating assets.

Author : Jack Mintz
Publisher : Unknown
Page : 32 pages
File Size : 52,6 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1290703907

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Incentives for Public Investment Under Fiscal Rules by Jack Mintz Pdf

The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about electoral prospects would favor expenditures providing immediate benefits to their voters. An alternative budgetary approach is to separate capital from current revenues and expenditures and relax fiscal constraints by allowing governments to finance capital expenditures with debt, as suggested by the golden rule approach to capital funding. But the effect of capital budgeting would be to provide opportunities to politicians to escape the fiscal rule constraints by shifting current expenditures into capital accounts that are difficult to measure properly, thereby leading to increased borrowing. As an alternative, the authors propose a modified golden rule limiting debt finance to a proportion of the government's investment in self-liquidating assets.

Author : Mr.Sanjeev Gupta,MissEstelle X. Liu,Mr.Carlos Mulas-Granados
Publisher : International Monetary Fund
Page : 38 pages
File Size : 40,9 Mb
Release : 2015-07-27
Category : Business & Economics
ISBN : 9781513583853

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Now or Later? The Political Economy of Public Investment in Democracies by Mr.Sanjeev Gupta,MissEstelle X. Liu,Mr.Carlos Mulas-Granados Pdf

This paper explores the impact of political and institutional variables on public investment. Working with a sample of 80 presidential and parliamentary democracies between 1975 and 2012, we find that the rate of growth of public investment is higher at the beginning of electoral cycles and decelerates thereafter. The peak in public investment growth occurs between 21 and 25 months before elections. Cabinet ideology and government fragmentation influence the size of investment booms. More parties in government are associated with smaller increases in public investment while left-wing cabinets are associated with higher sustained increases in investment. Stronger institutions help attenuate the impact of elections on investment, but available information is insufficient to draw definitive conclusions.

Author : Ms.Martine Guerguil,Pierre Mandon,Rene Tapsoba
Publisher : International Monetary Fund
Page : 47 pages
File Size : 49,9 Mb
Release : 2016-01-22
Category : Business & Economics
ISBN : 9781513581460

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Flexible Fiscal Rules and Countercyclical Fiscal Policy by Ms.Martine Guerguil,Pierre Mandon,Rene Tapsoba Pdf

This paper assesses the impact of different types of flexible fiscal rules on the procyclicality of fiscal policy with propensity scores-matching techniques, thus mitigating traditional self-selection problems. It finds that not all fiscal rules have the same impact: the design matters. Specifically, investment-friendly rules reduce the procyclicality of both overall and investment spending. The effect appears stronger in bad times and when the rule is enacted at the national level. The introduction of escape clauses in fiscal rules does not seem to affect the cyclical stance of public spending. The inclusion of cyclical adjustment features in spending rules yields broadly similar results. The results are mixed for cyclically-adjusted budget balance rules: enacting the latter is associated with countercyclical movements in overall spending, but with procyclical changes in investment spending. Structural factors, such as past debt, the level of development, the volatility of terms of trade, natural resources endowment, government stability, and the legal enforcement and monitoring arrangements backing the rule also influence the link between fiscal rules and countercyclicality. The results are robust to a wide set of alternative specifications.

Author : William Gbohoui
Publisher : International Monetary Fund
Page : 34 pages
File Size : 49,5 Mb
Release : 2021-11-12
Category : Business & Economics
ISBN : 9781616356200

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Uncertainty and Public Investment Multipliers: The Role of Economic Confidence by William Gbohoui Pdf

This paper investigates how macroeconomic uncertainty affects the fiscal multiplier of public investment. In theory, uncertainty can reduce the multiplier if the private sector becomes more cautious and does not respond to the fiscal stimulus. Conversely, it can increase the fiscal multiplier if public investment shocks improve private agents’ expectations about future economic outlook, and lead to larger private spending. Using the disagreement about GDP forecasts as a proxy for uncertainty, we find that unexpected increases in public investment have larger and longer-lasting effects on output, investment, and employment during periods of high uncertainty, with multipliers above 2, and the larger multipliers are not driven by economic slack. Public investment shocks are also found to boost private sector confidence during heightened uncertainty, driving-up expectations about future economic development which in turn magnify private sector response to the initial stimulus.

Author : Niels Hermes,Robert Lensink
Publisher : Unknown
Page : 40 pages
File Size : 44,5 Mb
Release : 2001
Category : Fiscal policy
ISBN : IND:30000129849794

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Fiscal Policy and Private Investment in Less Developed Countries by Niels Hermes,Robert Lensink Pdf