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We survey quantitative fiscal conditionality in selected sub-Saharan African PRGFsupported programs, and assess the conditionality against some possible benchmarks and best practices. While noting many caveats, the paper suggests some possible scope for further attuning of this conditionality to countries' specific macro-fiscal situations. The paper also offers some suggestions on how quantitative fiscal conditionality might be further enhanced.

Conditionality (International relations). --- Economic assistance -- Africa. --- Electronic books. -- local. --- Business & Economics --- Economic History --- Economic assistance --- Conditionality (International relations) --- Political conditionality --- International relations --- Loans, Foreign --- Exports and Imports --- Inflation --- Macroeconomics --- Public Finance --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Price Level --- Deflation --- International Lending and Debt Problems --- Public finance & taxation --- International economics --- Fiscal conditionality --- Fiscal stance --- Public debt --- External debt --- Fiscal policy --- Debts, Public --- Prices --- Debts, External --- Sierra Leone

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The size of government is a commonly used variable in many analytical studies on the effects of fiscal policy. An accepted practice is to measure it as the ratio of government spending to GDP. However, this is not the correct metric when computing the stabilization effects of nondiscretionary fiscal policy. Intuitively, public spending does not react to cyclical conditions as much as taxes do - as reflected in the standard zero-one elasticity assumptions for spending and revenue, respectively. This paper shows that the revenue to GDP ratio is the appropriate indicator of government size for the purpose of assessing the stabilization effects of nondiscretionary fiscal policy.

Economic stabilization. --- Fiscal policy. --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Adjustment, Economic --- Business stabilization --- Economic adjustment --- Stabilization, Economic --- Government policy --- Macroeconomics --- Public Finance --- Production and Operations Management --- Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General --- National Deficit Surplus --- National Budget, Deficit, and Debt: Other --- Comparative or Joint Analysis of Fiscal and Monetary Policy --- Stabilization --- Treasury Policy --- Fiscal Policy --- National Government Expenditures and Related Policies: General --- Personal Income, Wealth, and Their Distributions --- Macroeconomics: Production --- Public finance & taxation --- Automatic stabilizers --- Fiscal policy --- Expenditure --- Disposable income --- Output gap --- Expenditures, Public --- National income --- Production --- Economic theory

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Does reliance on transfers weaken fiscal discipline and encourage pro-cyclical fiscal policies in recipient subnational governments? Using fiscal reaction functions for a panel of the German Länder, this paper finds a positive answer to both questions. Net-recipient states (Länder, benefiting from the transfer system) have not reduced primary expenditure significantly in response to rising deficits, but have instead relied on vertical transfers from the federal government to ensure debt sustainability. Moreover, they have pursued pro-cyclical policies, particularly by raising expenditures in good times. Net-contributing Länder (paying into the transfer system), in contrast, have ensured fiscal sustainability through spending adjustments; they have also been less pro-cyclical. Panel vector auto-regressions confirm these findings.

Political Science --- Law, Politics & Government --- Public Finance --- Intergovernmental fiscal relations --- Fiscal policy --- Macroeconomics --- Production and Operations Management --- Fiscal Policy --- National Government Expenditures and Related Policies: General --- Macroeconomics: Production --- Taxation, Subsidies, and Revenue: General --- Public finance & taxation --- Expenditure --- Output gap --- Fiscal sustainability --- Revenue administration --- Expenditures, Public --- Production --- Economic theory --- Revenue --- Germany

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This technical note focuses on computing cyclically adjusted balances and automatic stabilizers. The note provides guidance on how to decompose overall fiscal balances into cyclical and cyclically adjusted components, and how to interpret automatic fiscal stabilizers. These indicators are commonly used to assess how fiscal policy responds to macroeconomic conditions. Various approaches to cyclical adjustment and estimation of the automatic stabilizers are possible. This note focuses on the approach used by the IMF’s Fiscal Affairs Department in the paper on the State of Public Finances and in the Fiscal Monitor.

Exports and Imports --- Macroeconomics --- Public Finance --- Production and Operations Management --- Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General --- National Deficit Surplus --- National Budget, Deficit, and Debt: Other --- Fiscal Policy --- Comparative or Joint Analysis of Fiscal and Monetary Policy --- Stabilization --- Treasury Policy --- Macroeconomics: Production --- International Lending and Debt Problems --- National Government Expenditures and Related Policies: General --- International economics --- Public finance & taxation --- Fiscal stance --- Automatic stabilizers --- Output gap --- Interest payments --- Expenditure --- Fiscal policy --- Production --- Economic theory --- Debt service --- Expenditures, Public

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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.

Economic assistance -- Econometric models. --- Electronic books. -- local. --- International Monetary Fund. --- Labor policy -- Econometric models. --- Wages -- Econometric models. --- Wages --- Labor policy --- Economic assistance --- Econometric models. --- Economic aid --- Foreign aid program --- Foreign assistance --- Grants-in-aid, International --- International economic assistance --- International grants-in-aid --- Labor --- State and labor --- Compensation --- Departmental salaries --- Earnings --- Pay --- Remuneration --- Salaries --- Wage-fund --- Wage rates --- Working class --- Government policy --- Internationaal monetair fonds --- International monetary fund --- Economic policy --- International economic relations --- Conditionality (International relations) --- Income --- Labor costs --- Compensation management --- Cost and standard of living --- Prices --- Public Finance --- Fiscal Policy --- Foreign Aid --- National Government Expenditures and Welfare Programs --- Wages, Compensation, and Labor Costs: General --- Wage Level and Structure --- Wage Differentials --- Public Sector Labor Markets --- Employment --- Unemployment --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Incomes Policy --- Price Policy --- Labour --- income economics --- Civil service & public sector --- Public finance & taxation --- Public sector wages --- Wage adjustments --- Civil service reform --- Government wage bill --- Expenditure --- Civil service --- Ghana