Aid flows
Fiscal policy for poverty reduction, reconstruction, and growth
A review of the major areas of fiscal policy
Authors:
T. Addison; A. Roe; M. Smith
Publisher:
United Nations University , 2006
This document reviews the major areas of fiscal policy, setting out and assessing how thinking around public spending, taxation, and the macroeconomics of fiscal reform have evolved, particularly towards reducing poverty, accelerating growth, and preventing conflict.
The authors suggest:
- aid cannot be effective without a good fiscal system and that the previous aid policies failed because of poor fiscal management
- good fiscal management is a difficult business in poor countries
- fiscal policy is more than just a question of good economics; it is also fundamental to the politics of development
- better management of public finances is imperative but often slow to implement.
They go on to suggest that:
- good fiscal policy should raise the growth rate
- the MDG’s will not be achieved without a good fiscal system
- fiscal reform can be a tool for peace.
They conclude that fiscal policy may reveal more about a country’s development strategy than probably any other area of policymaking.
