Fiscal Affairs Department
A t A G l A n c e, 2 0 1 2
I n t e r n A t I o n A l M o n e t A r y F u n d
Fiscal Affairs Department
F iscal policy affects macroeconomic stability, growth, and income distribu-
tion. Citizens expect their governments to ensure value for money from
public spending, a fair and efficient tax system, and transparent and accountable
management of public sector resources.
Since 1964, the Fiscal Affairs Department (FAD) of the International
Monetary Fund has been a leading source of fiscal policy and management
expertise worldwide. FAD monitors and analyzes global and regional fiscal trends;
advises IMF member countries on fiscal issues directly or in close cooperation with
the IMF area departments; and contributes to the design and implementation of
IMF-supported programs. FAD’s analysis and research are at the forefront of fiscal
policy debates and its recent work has contributed to the discussion of fiscal policy
options to address fiscal challenges in the aftermath of the global financial crisis.
Each year, FAD staff and experts provide advisory services to about 130 IMF
member countries comprising advanced, emerging, and low-income economies.
FAD receives welcome financial support from donors such as Belgium, Canada,
Germany, the European Commission, Japan, the Netherlands, Norway, Sweden,
Switzerland, the United Kingdom, and the United States, as well as from other
donors, supporting the IMF’s Regional Technical Assistance Centers (RTACs)
and two recently established Topical Trust Funds (TTFs).
Allocation of Key FAD Outputs in Fiscal Year 2012
supported programs Advise member
(5%) countries on ﬁscal
regional, and Technical Assistance
Senior Management. First row from left to right: Katherine Baer, Kentaro Ogata, Paolo Mauro, Martine Guerguil, Carlo Cottarelli,
Adrienne Cheasty, Marco Cangiano, Julio Escolano, Sanjeev Gupta. Second row: Philip Gerson, Benedict Clements, Abdelhak
Senhadji, Victoria Perry, Brian Christensen, Gerd Schwartz, Johannes Mueller, Juan Toro, Kiyoshi Nakayama, Michael Keen.
Gilbert Terrier and Bernardin Akitoby (not pictured).
FAD at Work
F AD supports the IMF’s interactions with member
countries by assigning some 50 fiscal economists
FAD’s Policy Work
to IMF surveillance and program teams. Further
countries are also covered through ad hoc participation
F AD is the source of a wealth of policy-oriented
analytical work, which is disseminated in several
in area department missions. In addition to analyzing
broad fiscal developments, FAD economists conduct A key publication is the IMF Fiscal Monitor, which forms
in-depth analysis of macrofiscal and structural fis- part of the IMF’s World Economic and Financial Surveys.
cal issues in the countries to which they are assigned. Issued twice a year (with interim quarterly updates), the
In carrying out their tasks, these economists draw on Fiscal Monitor provides a comprehensive assessment of
the extensive fiscal expertise of FAD as a whole. Their fiscal developments and prospects both globally and for
analysis forms part of the IMF staff ’s reporting on the various country groupings, including advanced and emerg-
member countries concerned. ing economies.
FAD provides technical assistance (TA) to member FAD staff also produce other cross-country policy analy-
countries both to enhance their fiscal performance and sis, including papers for the IMF’s Executive Board, Staff
to strengthen their fiscal institutions. The bulk of FAD Discussion Notes, Working Papers, Occasional Papers,
TA is provided in four areas: Technical Notes and Manuals, and books (available on the
IMF’s website: www.imf.org), as well as contributions to
■ Public financial management: legal and regulatory
major economic and public finance journals.
framework, budget management, medium-term
expenditure framework, cash management, accounting, As part of its contributions to the global economic policy
reporting, and debt management. dialogue, FAD organizes a number of conferences and
■ Tax policy: general tax policy reviews and specific tax seminars each year. Chief among them is the Fiscal Forum
policy advice, particularly in the areas of income tax, (http://www.imf.org/external/np/seminars/eng/2012/
value-added tax, and taxation of natural resources, fiscal/), which is held once a year and draws high-level
including oil and gas. policy makers from a cross section of IMF member
countries. FAD staff also participate in international
■ Revenue administration: tax and customs
conferences and meetings where they present the
administration, social security contribution collection,
department’s analysis and research.
and implementation of major tax policy changes.
■ Expenditure policy: short-term expenditure FAD issues an e-newsletter quarterly to inform officials
rationalization, social security reform and in member countries of its analytical and research work.
administration, and incorporation of cost-effective Readers can subscribe by sending a request to FADsub-
social safety nets into IMF-supported programs. firstname.lastname@example.org. FAD also maintains a Public Financial
Management blog (http://blog-pfm.imf.org), which has a
In addition, assistance is provided in macrofiscal
wide readership among officials and academics, and FAD’s
management, public-private partnerships, fiscal
Director, Carlo Cottarelli, is a regular blogger on iMFdi-
risks, fiscal rules, fiscal transparency, and fiscal
FAD at Work
Technical Assistance Delivery
F AD’s TA activities take different forms and are
tailored to the circumstances of each member
country. Missions from headquarters constitute an
TA of this kind has highlighted characteristics unique to
FAD and IMF TA. First, such TA can respond quickly
to urgent government requests—with specialized teams
important element of FAD’s TA. These missions work often in the field on short notice and sometimes ahead of
with the authorities (and other TA providers) in ana- other IMF operations. Second, the technical diagnostics
lyzing the sources of weakness in fiscal institutions and and remedial recommendations can provide input to the
drawing up an action plan to remedy these weaknesses. design of IMF-supported programs.
They also provide advice on fiscal policy design and
TA provided by Regional Technical Assistance Centers
implementation and help the authorities monitor the
(RTACs). To help deliver effective follow-up assistance
implementation of fiscal reforms. A report on findings
and to support implementation of reforms proposed by
and recommendations is provided to the authorities
missions from headquarters, the IMF has a network of
at the end of each mission. These reports are prepared
eight RTACs covering about 90 countries in the Pacific
for the authorities and shared only with the World
(PFTAC), the Caribbean (CARTAC), East, West, Central,
Bank, but encouraged by the IMF, the authorities of
and Southern Africa (AFRITAC East, AFRITAC West,
the member country themselves may decide these
AFRITAC Central, and AFRITAC South), the Middle
reports should be more widely distributed. FAD TA
East (METAC), and Central America (CAPTAC). One
also includes stand-alone expert assignments that assist
additional center is planned, which will cover countries in
countries in implementing mission recommendations.
Anglophone West Africa. Through a team of resident advi-
These assignments can be resident, short-term, peripa-
sors, supplemented by short-term experts, each RTAC pro-
tetic (i.e., repeat visits), or be fielded from the IMF’s
vides TA in the core areas of the IMF’s expertise, including
Regional Technical Assistance Centers (RTACs).
macrofiscal, public financial management, and revenue
The distribution of missions and follow-up assistance
administration. Their work is part of FAD’s TA program
through expert assignments is shown on the following
and is subject to the same rigorous supervision and quality
two world maps.
control as headquarter-led activities.
FAD’s TA has been vital in countries affected by the
Topical Trust Funds. The IMF has launched two multi-
recent global financial crisis. Intensive TA has been pro-
donor topical trust funds supporting TA to members in
vided in a number of policy areas critical to helping these
Tax Policy and Administration (TPA TTF) and Man-
countries respond and recover from the crisis. Examples
aging Natural Resource Wealth (MNRW TTF). The
assistance financed through these trust funds benefits
■ rationalizing government expenditures in the short run from the IMF’s technical assistance infrastructure and
and strengthening pension systems (e.g., Belarus and proven expertise. It also provides a vehicle for donor
Greece); coordination and commissioning focused policy devel-
■ developing medium-term fiscal frameworks to tighten opment in these areas.
budget execution and expenditure controls and to
improve cash and debt management (e.g., Greece,
Iceland, Poland, Romania, and Serbia);
■ identifying tax policy options (e.g., Greece, Poland, and
■ fortifying tax administration in response to sharp
crisis-related revenue declines (e.g., Greece, Latvia, and
F AD’s macrofiscal work includes cross-country
analysis and monitoring, research on emerging
fiscal issues, and analytical support at the individual
The Fiscal Monitor monitors and analyzes the latest
country level. The latter is achieved by assignment of public finance developments worldwide, updates fis-
FAD staff to area department teams to help analyze key cal implications of the crisis and medium-term fiscal
policy issues. projections, and assesses policies to put public finances
on a sustainable footing.
In addition, FAD offers TA on various macrofiscal issues,
including: The Fiscal Monitor is one of the three IMF cross-
country flagship publications, in addition to the World
Macrofiscal modeling and the improvement of forecasts
Economic Outlook (WEO) and the Global Financial
used for fiscal policy formulation and budget preparation.
Stability Report (GFSR). Two full reports are prepared
Macroeconomics and the fiscal position, including ana- each year together with two quarterly Updates. The
lyzing the impact of changes in the macroeconomic envi- Fiscal Monitor’s projections are based on the same da-
ronment on the fiscal position, the impact of fiscal policy tabase used for the WEO and GFSR. The publication
on macroeconomic outturns, the sustainability of fiscal and dataset are available at: http://www.imf.org/exter-
policies and the design of fiscal adjustment plans, the nal/ns/cs.aspx?id=262 and also on the IMF eLibrary
impact of expenditure envelopes from a short-, medium-, iPad app.
and long-term perspective, fiscal-financial sector linkages,
In addition to analyzing and surveying fiscal develop-
and the coordination of monetary and fiscal policy.
ments, the Fiscal Monitor also identifies new medium-
Guidance on fiscal policy formulation, including defin- term fiscal challenges and provides policy options. For
ing the role of fiscal objectives and targets, coordinating example, past reports included research on spending
policies across different levels of government, managing pressures arising from health care entitlements and
government assets and liabilities, and, designing rules- reforms needed to contain these costs. Another study
based fiscal frameworks, stabilization and savings mecha- focused on the emerging risks to fiscal transparency, as
nisms, and independent fiscal institutions. temptations rise to supplement genuine fiscal adjust-
Organizational aspects of the macrofiscal function, ment with accounting stratagems. In addition, analysis
including defining the roles and responsibilities of minis- and recommendations were provided on how “fis-
tries of finance, strengthening their capacity to carry out cal devaluation,” that is, a revenue-neutral shift from
macrofiscal functions, and designing a macrofiscal unit. direct to indirect taxation, can mimic the effects of an
exchange rate depreciation and support more broad-
Fiscal risk assessment, transparency and disclosure, and based reforms that improve competitiveness.
management, including advising on analytical methods
as well as coordination and other institutional modalities.
Considerable synergies with other TA areas provide guid-
ance in the design of specific tax and expenditure policies
and institutions to achieve macrofiscal objectives.
The following boxes illustrate the diversity of FAD’s
Fiscal Governance: Greater Role for Numerical Fiscal Rules and Fiscal Councils
Adopting fiscal rules is one way that governments can www.imf.org/external/pubs/cat/longres.cfm?sk=26094.0
help bridge the gap between lowering currently high
Another way of promoting greater fiscal discipline and
fiscal imbalances and enhancing the credibility of overall
supporting increasingly more complex fiscal rules is
fiscal consolidation. New analysis by FAD takes stock of
setting up independent fiscal councils, entrusted with
numerical fiscal rules around the world and compiles a
the task of monitoring fiscal policies and raising public
dataset—covering national and supranational fiscal rules
awareness of their fiscal implications. Qualitative evidence
in 81 countries from 1985 to end-March 2012 (Figures
suggests that such institutions have been instrumental
1 and 2)—presenting details about the rules’ key design
in fostering democratic accountability in many advanced
elements. This study allows governments to draw lessons
economies. Moreover, preliminary findings of on-going
from cross-country experiences in case they decide to
FAD research—using new indicators to measure the me-
adopt fiscal rules or amend existing ones. The dataset
dia impact of fiscal council interventions—suggest that
supports FAD’s technical assistance on fiscal governance
fiscal watchdogs tend indeed to react to budget slippages.
while also serving as an input for research in this area.
Given the rising interest in setting up fiscal councils,
The link to the dataset and the accompanying Working
FAD provides analysis and advice to member countries.
Paper (WP/12/187) are available on imf.org at: http://
Figure 1. Countries with Fiscal Rules (National and Supranational), 2012
Number of Numerical Rules, 2012
Three or more
30% Source: National authorities; and IMF staff assessment.
Note: Based on fiscal rules in effect by end-March 2012.
Number of Countries Countries with
Figure 2. Figure 2. Number ofwith Fiscal Rules Fiscal Rules
60 All rule
Source: National authorities; and IMF staff assessment.
Note: Based on fiscal rules in effect by end-March 2012.
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Structural Fiscal Balances
Adjusting fiscal balances for the output cycle is cru- proaches that can be used to make such adjustments.
cial for assessing fiscal sustainability. Other temporary The framework was recently supplemented with
factors beyond the output cycle may also affect fiscal an Excel-based tool that contains default elasticity
balances, obscuring the underlying fiscal position. In values for revenue and expenditure based on estimates
recent years, policymakers have increasingly turned their derived from relevant studies in the literature. The
attention to the structural fiscal balance to address these tool also incorporates modules that allow for different
concerns. Structural fiscal balances provide a more accu- types of structural adjustment to be applied individu-
rate view of the underlying stance and sustainability of ally. This approach provides flexibility to make adjust-
fiscal policy by correcting for a broad set of cyclical and ments only for those factors relevant to the country
transitory factors, including commodity shocks, asset under consideration.
prices, and other one-off factors.
The technical note, Excel-based tool, and further back-
The adjustment needs to take relevant country-specif- ground information are available at: http://www.imf.
ic factors into account, including data availability, the org/external/np/fad/strfiscbal/index.htm. An FAD team
structure of the economy, and the elasticity of reve- is also available at FADF1SFB@imf.org to respond to
nues and expenditures to temporary factors. An FAD further requests regarding the tool and the information
technical note (TNM/11/02) outlines several ap- provided on the website.
Business Cycle Effect
Commodity Price Effect
Asset Price Effect
Technical Assistance Missions from the Fiscal Affairs Department
Policy Advice and Development of Fiscal Reforms and Action Plans
Western Hemisphere Region
19% Africa Region
TA mission intensity
Number of Missions, FY2010-FY2012
High: 5 or more
Asia and Paciﬁc Region
Middle East and
Central Asia Region
Topical distribution of TA missions by region
Public Financial Management
Size of pie indicates volume of TA.
Medium and Long-term Assistance through Expert Assignments and Support
Strengthening Institutions and Fiscal Management Capacities
Western Hemisphere Region
34% 61% 4%
TURKS & CAICOS
Intensity of expert and RTAC TA delivery
ISLANDS REPUBLIC ST. KITTS AND NEVIS In person years, FY2010-FY2012
BELIZE ANTIGUA AND BARBUDA
JAMAICA HAITI MONTSERRAT No TA
Low: less than 0.5
ST. VINCENT AND
THE GRENADINES ST. LUCIA
EL SALVADOR BARBADOS
TRINIDAD AND TOBAGO
Medium: 0.5 - 1.5
High: more than 1.5
Member of an RTAC
from Regional Technical Assistance Centers (RTACs)
Asia and Paciﬁc Region
Middle East and Central
FEDERATED STATES MARSHALL
OF MICRONESIA ISLANDS
Topical distribution of expert and RTAC NEW GUINEA
delivery by region TIMOR
Public Financial Management
Tax Policy and Revenue Administration FIJI COOK ISLANDS
Size of pie indicates volume of TA.
FAD provides support to enhance the efficiency,
fairness, and productivity of tax systems. FAD’s
advice covers the design and implementation of reforms
Natural resources and environmental work
Extractive industries. FAD completed 31 techni-
of corporate and personal income taxes, taxes on capi- cal assistance missions in this area in fiscal year 2012,
tal income and financial institutions, VAT and other partially utilizing donor financing available through
indirect taxes, local property taxes, and—increasingly— the newly established Topical Trust Fund on Manag-
work on fiscal regimes for natural resource extraction, ing Natural Resource Wealth (MNRW TTF). Techni-
and environmental taxes. Recent work includes: cal assistance on taxation of natural resources is diverse,
focused on evaluation and design of fiscal regimes, and
Taxes and the global economic crisis. FAD has exten-
also including revenue administration, forecasting, and
sively analyzed the interactions of tax policy and the
management. Tax policy advice assists in designing
financial crisis, and the tax policy aspects of strategies to
an efficient mechanism for capturing economic rents,
restore fiscal sustainability. This is reflected in both ana-
enhancing government revenues while maintaining a
lytical work and technical assistance to member countries.
fiscal regime attractive to investors. FAD undertakes
Tax coordination, customs unions, and tax incentives. extensive analytical work in the area and conducts
Increased trade and capital mobility, amplified by regional workshops and conferences. The latest event was the
trade arrangements, necessitate improved tax coordina- Resources without Borders workshop, addressing inter-
tion. FAD assists regional organizations and country national issues for extractive industries.
groups with these problems.
Environmental taxation. FAD’s work emphasizes the
Financial markets and instruments. The department economic rationale for using fiscal instruments (e.g.,
provides advice on taxation of financial instruments and environmental taxes and emissions trading systems)
institutions, as well as on tax aspects of capital market to address environmental problems such as climate
development. change and poor air quality. A recent FAD e-book
Recurrent taxes on real property. An area of increasing provides guidelines for the design of fiscal policies to
concern for member countries is more effective use of these mitigate greenhouse gas emissions. A current project is
taxes, which are both economically efficient and equitable. assessing the magnitude of pollution and other exter-
The tax policy division advises on design and strategy for nalities to provide guidance on appropriate fuel tax lev-
implementation of modern property tax systems. els for different countries. FAD also provides technical
assistance in these areas.
International aspects of corporate taxation. The effects
of bi-lateral tax treaties, transfer pricing, and international
corporate income tax structures are increasingly relevant
for both developing and industrial countries.
Interaction of the tax system and labor market outcomes.
Recent work includes technical assistance advice and con-
tributions to a departmental paper covering both tax and
expenditure aspects of structural labor market problems.
Modernizing revenue administration is a key objective
Analytical Work in Revenue in many countries. FAD provides TA in tax and customs
Administration administration to help design reform strategies to achieve
optimal revenue levels at the lowest administrative and
RA-FIT compliance cost.
This new data collection tool is building a global data-
Revenue administration management and organiza-
base of information about tax and customs administra-
tion. FAD tailors to country circumstances reforms
tions to provide baseline performance indicators and
aimed at administrative effectiveness and efficiency. These
identify trends. Developed as a service and updated
reforms include an effective headquarters that provides
annually, RA-FIT will help member countries evaluate
strategic planning and monitors field office activities
their revenue administrations against benchmarks, and
against clear performance measures, and appropriate
in conjunction with other diagnostic tools, it will help
reform management arrangements to ensure success.
them identify priorities for improvement, better coor-
dinate reform efforts, and monitor results over time. Tax administration. TA includes guidance to improve
The first phase consists in collecting information from management and performance of specific taxes (e.g., VAT,
one hundred low and lower middle-income countries. income taxes, excises, and social contributions). It devel-
Aggregated baseline indicators, analyzed by region and ops segmentation strategies for different taxpayer groups,
country income group, will be published in 2013. such as large business tax administration, and simplified
regimes for small businesses. Assistance is also provided
Tax Diagnostic Tool to strengthen core functions (e.g., audit, enforcement,
Work is underway to develop, with donor support, a filing, and payment), based on voluntary compliance,
tax administration diagnostic tool, modeled on the taxpayer self-assessment, effective taxpayer services, and
successful Public Expenditure and Financial Ac- well-designed IT strategies.
countability (PEFA) tool used in evaluating public Customs administration. FAD TA reflects the interna-
financial management. Building on the findings of a tional standards established by the World Customs and
2011 feasibility study, when fully operational by early World Trade Organizations as well as the requirements of
2014, this diagnostic tool will provide to countries, regional agreements. Many low-income countries rely on
international organizations, and donors a consistent revenues from import taxes and duties, even as they un-
and shared understanding of the status of tax ad- dertake trade facilitation reforms to reduce costs and in-
ministration—the essential basis for designing more crease export competitiveness. FAD TA strategies balance
coordinated reform plans. both objectives by strengthening legislative and regulatory
controls and simplifying procedures and improving basic
RA-GAP revenue assessment and collection.
FAD’s revenue gap program is another way of assist-
ing countries to measure the overall performance of
revenue administration. This work involves a systematic
evaluation of the difference between potential revenue
collections and actual collections, given the policy
settings in place and the factors contributing to this.
Revenue gaps can be measured in terms of non-filing,
non-payment and tax evasion by taxpayers, and the
impact of measures such as tax expenditures.
Public Financial Management
S trong Public Finance Management (PFM)
systems are key to ensuring effective delivery of
intended budget policies. FAD’s TA in the PFM area
The Treasury Department (TESOFE) of the Secretary
Comprehensive assessment of PFM systems. FAD pro- of Finance and Public Debt (SHCP) of Mexico has
vides in-depth, diagnostic analysis of the efficiency, effec- been implementing a modernization reform of treasury
tiveness, and transparency of PFM systems through in- management in line with international best practices
struments such as TA missions, reports on the observance since 2007. This reform includes modernizing the
of standards and codes (ROSCs), and public expenditure financial management information system, improving
and financial accountability (PEFA) assessments. the legal and regulatory framework, improving cash
Basic PFM systems. Advice is provided to member flow forecasting and liquidity management, and docu-
countries to enhance the budget as the central instru- menting procedures and processes.
ment for fiscal management and the allocation of public
resources. Issues treated include budget coverage, particu- Approach
larly the integration of extra-budgetary and quasi-fiscal FAD has helped TESOFE by providing high-level
activities; the budget formulation process; treasury sys- advice through a programmatic approach that included
tems; expenditure and revenue classification; accounting headquarters missions, short-term expert visits, semi-
and fiscal reporting; cash management and commitment nars and workshops. FAD is also supporting the forum
control; and internal control and audit. of Latin American treasury departments through an
annual seminar and preparation of studies of com-
More advanced reforms. Depending on the level of devel-
mon interest. The technical notes and manuals on the
opment of a member country, FAD promotes the adop-
preparation of a business continuity plan and on the
tion of best practices, such as integrating the budget into
relationship between treasuries and central banks are
a medium-term fiscal and budgeting framework; program
and performance budgeting; and accrual accounting.
Legislative and regulatory drafting. The department Results
assists in preparing budget system laws and fiscal respon- The main outputs so far are:
sibility legislation in cooperation with the IMF’s Legal
Department. ■ The coverage of the treasury single account (TSA)
has been broadened.
Restructuring of central finance agencies. FAD pro-
■ Cash planning, cashflow forecasting, and liquidity
vides expertise in the re-organization of state treasuries
management have been improved.
and debt and cash management offices, and advises on
how to reshape a ministry of finance as a whole to be- ■ A business continuity plan and an operational risk
come an effective manager of public resources. assessment framework have been implemented.
■ The TSA has brought important savings on bank
services, improved monitoring and control of bud-
getary savings through improved cash management,
enhanced the capacity of treasury officials, and
improved documentation of procedures and systems.
Liberia emerged from conflict in 2003 with shattered
institutions and without a framework for running
an effective budget. Early efforts, supported by FAD
and others, focused on re-establishing basic Public
Financial Management (PFM). Encouraged by early
successes, Liberia is now in a second round of more
advanced PFM reforms.
Mexico City, Mexico FAD responded quickly to a request for technical
advice from Ellen Johnson Sirleaf ’s newly elected gov-
ernment, starting with a diagnostic mission in 2007 to
consolidate basic PFM controls, and follow up TA on
drafting a new PFM legal framework. A second mis-
sion in 2009 made recommendations on implementing
the new PFM Act and helped launch the next phase of
reforms, with follow-up provided by a resident PFM
advisor funded by Japan as well as expert visits. In
2010, FAD selected Liberia to pilot a new program-
matic approach to TA, with a three-year work program
linked to specific donor funding—Sweden and Euro-
pean Union for the PFM component.
■ Liberia re-established control over public finances,
avoided new arrears, completed the HIPC process,
and introduced an employee direct deposit scheme
to limit payroll risks. This result is highlighted in the
IMF video “Africa Rebuilds: IMF Technical As-
sistance in Liberia” available at http://www.imf.org/
■ Liberia’s 2009 PFM Act created, for the first time in
over 30 years, a comprehensive legal framework to
guide PFM, anchoring all subsequent reforms.
■ The 2011 PFM reform strategy provides a focal
point for donor funding, including $28 million re-
cently signed by Sida, World Bank, African Devel-
opment Bank, and USAID.
■ Liberia’s 2012/13 medium-term budget framework
provides a clear policy link between the budget and
the Poverty Reduction and Growth Strategy.
T he quality of spending has a direct bearing on
growth and social development in IMF mem-
ber countries. FAD provides a range of analytical and
The Economics of Public Health Care
Reform in Advanced and Emerging
advisory services in this area: Economies
In advanced economies, public expenditure on health
Expenditure efficiency. The department, where appropri-
is putting enormous pressure on government budgets
ate in close collaboration with the World Bank, provides
and is expected to rise further. In emerging economies,
advice on short-term expenditure rationalization, aimed
spending is much lower, but health insurance coverage
at identifying sustainable ways of raising the efficiency of
is incomplete; for these economies, health care must be
public spending. Advice is provided on employee com-
expanded in a fiscally sustainable manner.
pensation, pensions and other social insurance, health and
education spending, subsidies, and social assistance. A new FAD book, The Economics of Public Health Care
Reform in Advanced and Emerging Economies, analyzes
Equity and social spending. The department is engaged
the outlook for public health expenditure in the next
in work on the effects of fiscal policy on equity and the
20 to 40 years and the options for health care reform
impact of Fund-supported programs on health and edu-
in both advanced and emerging economies, drawing on
lessons from across the globe. The analysis is based on
Social safety nets. Advice is provided on incorporating econometric analysis, event analysis, and detailed case
cost-effective social safety nets during fiscal adjustment. studies of 18 economies.
This has included technical assistance and policy work on
Dana P. Goldman, Professor and Norman Topping
how to protect the poor during subsidy reform.
Chair in Medicine and Public Policy, University
Public-private partnerships (PPPs). TA to member of Southern California, suggests “…This book is a
countries on PPPs aims at helping countries manage the must-read for anyone interested in understanding the
fiscal risks of PPPs, in particular through strengthening extent of the global health crisis…and what nations
institutional capacity and transparency. can do about it.”
Age-related spending. Fiscal consolidation efforts in The Economics of Public Health Care Reform in Advanced
advanced and emerging economies will require that and Emerging Economies, ed. by B. Clements, D. Coady,
countries confront spending pressures on public health and S. Gupta (IMF, 2012). The book can be down-
and pensions. TA on pension reform and FAD’s policy loaded free from the Fund’s website.
work are helping countries meet this challenge, including
a new book on health reform (see Box).
Fiscal policy and employment. The department is en-
gaged in policy work assessing the impact of expenditure
and tax reforms to boost employment.
Selected Recent Publications
IMF Fiscal Monitor IMF Technical Notes and Manuals
Fiscal Monitor Update: Nurturing Credibility While Man- Operational Risk Management and Business Continuity
aging Risks to Growth, Fiscal Affairs Department, Planning for Modern State Treasuries, No. 5, I. Storkey,
International Monetary Fund, Washington DC, July 2011.
Treasury Single Account: An Essential Tool for Government
Fiscal Monitor: Balancing Fiscal Policy Risks, Fiscal Affairs Cash Management, No. 4, S. Pattanayak and I. Fain-
Department, International Monetary Fund, Washing- boim, 2011.
ton DC, April 2012.
Chart of Accounts: A Critical Element of the Public Financial
Fiscal Monitor Update: As Downside Risks Rise, Fiscal Management Framework, No. 3, J. Cooper and S. Pat-
Policy Has To Walk a Narrow Path, Fiscal Affairs De- tanayak, 2011.
partment, International Monetary Fund, Washington
DC, January 2012.
IMF Working Papers
Fiscal Monitor: Addressing Fiscal Challenges to Reduce Eco-
nomic Risks, Fiscal Affairs Department, International “Fiscal Rules in Response to the Crisis—Toward the
Monetary Fund, Washington DC, September 2011. “Next-Generation” Rules. A New Dataset,” A.
Schaechter, T. Kinda, N. Budina, and A. Weber,
IMF Staff Discussion Notes “Foreign Aid and Revenue: Still a Crowding Out Effect?”
Income Inequality and Fiscal Policy, F. Bastagli, D. Coady, D. Benedek, E. Crivelli, S. Gupta, and P. Muthoora,
and S. Gupta, SDN/12/08, 2012. WP/12/186, 2012.
Fiscal Frameworks for Resource Rich Developing Countries, “Great Recession and Fiscal Squeeze at U.S. Sub-national
T. Baunsgaard, M. Villafuerte, M. Poplawski-Ribeiro, Government Level,” J. Jonas, WP/12/184, 2012.
and C. Richmond, SDN/12/04, 2012.
“Quality of Government and Living Standards: Adjusting
Accounting Devices and Fiscal Illusions, T. C. Irwin, for the Efficiency of Public Spending,” F. Grigoli and
SDN/12/02, 2012. E. Ley, WP/12/182, 2012.
What Happens to Social Spending in IMF-Supported “Environmental Tax Reform: Principles from Theory
Programs? B. Clements, S. Gupta, and M. Nozaki, and Practice to Date,” D. Heine, J. Norregaard, and I.
SDN/11/15, 2011. W.H. Parry, WP/12/180, 2012.
“Public Expenditure in the Slovak Republic: Composi-
IMF Books and Occasional Papers tion and Technical Efficiency,” F. Grigoli, WP/12/173,
Policy to Mitigate Climate Change: A Guide for Policymak-
ers, ed. by R. de Mooij, I. W.H. Parry, and M. Keen, “The Impact of Longevity Improvements on U.S. Corpo-
2012. rate Defined Benefit Pension Plans,” M. Kisser, J. Kiff,
E. S. Oppers, and M. Soto, WP/12/170, 2012.
The Economics of Public Health Care Reform in Advanced
and Emerging Economies, Benedict J. Clements, David “Quantifying Impact of Aging Population on Fiscal
Coady, and Sanjeev Gupta, June 2012. Space,” S. G. Park, WP/12/164, 2012.
Chipping Away at Public Debt, Sources of Failure and Keys “Fiscal Transparency, Fiscal Performance and Credit Rat-
to Success in Fiscal Adjustment, ed. by P. Mauro, Wiley, ings,” E. Arbatli and J. Escolano, WP/12/156, 2012.
“Financial Intermediation Costs in Low-Income Coun-
tries: The Role of Regulatory, Institutional, and Macro-
economic Factors,” T. Poghosyan, WP/12/140, 2012.
Selected Recent Publications
“Walking Hand in Hand: Fiscal Policy and Growth in “Oil Exporters’ Dilemma: How Much to Save and
Advanced Economies,” C. Cottarelli and L. Jaramillo, How Much to Invest,” R. Cherif and F. Hasanov,
WP/12/137, 2012. WP/12/04, 2012.
“Appraising Credit Ratings: Does the CAP Fit Bet- “Who’s Going Green and Why? Trends and Determi-
ter than the ROC?” R. J. Irwin and T. C. Irwin, nants of Green Investment,” L. Eyraud, A. Wane, C.
WP/12/122, 2012. Zhang, and B. Clements, WP/11/296, 2011.
“Fiscal Consolidation in Southeastern European Coun- “Evaluating Designs for a Fiscal Rule in Bulgaria,” J. R.
tries: The Role of Budget Institutions,” B. Olden, D. Andritzky, WP/11/272, 2011.
Last, S. Yläoutinen, and C. Sateriale, WP/12/113,
2012. “Assessing the Variability of Tax Elasticities in Lithu-
ania,” T. Poghosyan, WP/11/270, 2011.
“Narrowing Vertical Fiscal Imbalances in Four European
Countries,” I. Karpowicz, WP/12/91, 2012. “The Puzzle of Persistently Negative Interest Rate-
Growth Differentials: Financial Repression or Income
“’Fiscal Devaluation’ and Fiscal Consolidation: The Catch-Up?” J. Escolano, A. Shabunina, and J. Woo,
VAT in Troubled Times,” R. de Mooij and M. Keen, WP/11/260, 2011.
“Decentralizing Spending More than Revenue: Does It
“Debt, Taxes, and Banks,” M. Keen and R. de Mooij, Hurt Fiscal Performance?” L. Eyraud and L. Lusinyan,
WP/12/48, 2012. WP/11/226, 2011.
“Fiscal Performance, Institutional Design and Decentral- “Spatial Spillovers in Emerging Market Spreads,” E.
ization in European Union Countries,” J. Escolano, L. Baldacci, S. Dell’Erba and T. Poghosyan, WP/11/221,
Eyraud, M. Moreno Badia, J. Sarnes, and A. Tuladhar, 2011.
“Efficiency-Adjusted Public Capital and Growth,” S.
“Stock-Flow Adjustments and Fiscal Transparency: A Gupta, A. Kangur, C. Papageorgiou and A. Wane,
Cross-Country Comparison,” A. Weber, WP/12/39, WP/11/217, 2011.
“Public Debt in Advanced Economies and its Spillover
“Macroeconomic and Welfare Costs of U.S. Fiscal Imbal- Effects on Long-term Yields,” C. E. Alper and L.
ances,” B. Gruss and J. L. Torres, WP/12/38, 2012. Forni, WP/11/210, 2011.
“A Partial Race to the Bottom: Corporate Tax Develop- “The Taxation and Regulation of Banks,” M. Keen,
ments in Emerging and Developing Economies,” S. WP/11/206, 2011.
M. Ali Abbas and A. Klemm, with S. Bedi and J. Park,
WP/12/28, 2012. “Public Debt Targeting An Application to the Carib-
bean,” A. Guerson and G. Melina, WP/11/203, 2011.
“Pricing of Sovereign Credit Risk: Evidence from Ad-
vanced Economies during the Financial Crisis,” C. E. “Burkina Faso—Policies to Protect the Poor from the
Alper, L. Forni and M. Gerard, WP/12/24, 2012. Impact of Food and Energy Price Increases,” J. Arze
del Granado and I. Adenauer, WP/11/202, 2011.
“Central Banks Quasi-Fiscal Policies and Inflation,” S.G.
Park, WP/12/14, 2012. “Taxing Financial Transactions: An Assessment of
Administrative Feasibility,” J. Brondolo, WP/11/185,
“A Toolkit to Assessing Fiscal Vulnerabilities and Risks 2011.
in Advanced Economies,” by a staff team led by A.
Schaechter, with C. E. Alper, E. Arbatli, C. Caceres, G. “Customs Administration Reform and Modernization
Callegari, M. Gerard, J. Jonas, T. Kinda, A. Shabunina, in Anglophone Africa - Early 1990s to Mid-2010,” J.
and A. Weber, WP/12/11, 2012. Zake, WP/11/184, 2011.
“Democratic Accountability, Deficit Bias, and Indepen-
dent Fiscal Agencies,” X. Debrun, WP/11/173, 2011.
Selected Recent Publications
Papers in Academic Journals “Historical Patterns and Dynamics of Public Debt—Evi-
dence From a New Database,” S M. Ali Abbas, N. Bel-
“Reassessing the fiscal mix for successful debt reduction,” hocine, A. El-Ganainy, and M. Horton, IMF Economic
E. Baldacci, S. Gupta, C. Mulas-Granados, Economic Review, Vol. 59(4), pp. 717-42, December 2011.
Policy, Vol. 27(71), pp. 365-406, July 2012.
“Fiscal Policy and the Current Account,” S M. Ali Ab-
“Reforming the tax system to promote environmental ob- bas, J. Bouhga-Hagbe, A. Fatás, P. Mauro and R. C.
jectives: An application to Mauritius,” I. Parry, Ecologi- Velloso, IMF Economic Review, Vol. 59(4), pp. 603-29,
cal Economics, Vol. 77, pp. 103–12, May 2012. December 2011.
“On the Drivers of FDI and Portfolio Investment: A “The Distributional Implications of Income Under-Re-
Simultaneous Equations Approach,” T. Kinda, Inter- porting in Hungary,” D. Benedek and O. Lelkes, Fiscal
national Economic Journal, Vol. 26(1), pp. 1–22, March Studies, Vol. 32(4), December 2011.
“International fuel tax assessment: an application to
“How Much Inequality is Necessary for Growth?” Fuad Chile,” I. Parry and J. Strand, Environment and De-
Hasanov, Harvard Business Review, January-February velopment Economics, Vol. 17, pp. 127-44, November
“Endogenous timing in general rent-seeking and conflict “Climate Policy in Crisis and Recovery,” B. Jones and M.
models,” M. Hoffmann and G. Rota-Graziosi, Games Keen, Journal of International Commerce Economics and
and Economic Behavior, Vol. 75, pp. 168–84, December Policy, Vol. 2(1), pp.103-19, June 2011.
The Fiscal Affairs Department (FAD) seeks talented and dedi-
cated professionals, with a background in different areas of public
finance, to work on macrofiscal policy issues and to provide techni-
cal assistance advice to IMF member countries on public financial
management, tax policy reform, revenue administration, and various
expenditure policy issues. Vacancies in FAD for staff and long-term
expert positions are posted on http://www.imf.org/external/np/adm/
FAD also seeks experts who are interested in occasional short-term
(i.e., 2-3 week) assignments. More information is available at
http://www.imf.org/external/np/adm/rec/job/shortexp.htm and inter-
ested candidates may send their CVs to FADexperts@imf.org.
Sanjeev Gupta Gilbert Terrier Gerd Schwartz
Deputy Director Deputy Director Deputy Director
TA to Africa TA to Western Hemisphere TA to Europe
email@example.com firstname.lastname@example.org email@example.com
Philip Gerson Michael Keen
Deputy Director Deputy Director
TA to Asia and Pacif ic Region TA to Middle East and Central Asia
Assistant Director and Division Chief,
Assistant Director and Division Chief,
Public Financial Management II
Public Financial Management I
Asia and the Pacif ic, Western Hemisphere, and
Anglophone Africa, Middle East and Central Asia, and Europe
non-Anglophone countries in Africa
Martine Guerguil Abdelhak Senhadji
Assistant Director and Division Chief, Assistant Director and Division Chief,
Fiscal Policy and Surveillance Fiscal Operations I
Division Chief, Revenue Administration I
Asia and the Pacif ic, Middle East
Fiscal Operations II
and Central Asia, and Europe
Division Chief, Revenue Administration II
Division Chief, Tax Policy
Africa and Western Hemisphere
Benedict Clements Julio Escolano
Division Chief, Expenditure Policy Advisor
Kiyoshi Nakayama Kentaro Ogata
Division Chief, Resource and Information Management
1. Voices from Senior Country Officials on Advisory Services
2. Africa Develops: IMF Technical Assistance in Mali (English
3. Africa Rebuilds: IMF Technical Assistance in Liberia
4. The Economics of Public Health Care Reform in Advanced
and Emerging Economies
5. Back to the Future: A History of Global Debt
6. Chipping Away at Public Debt
On the Cover
Effects of Good Government
by Ambrogio Lorenzetti
Siena, Italy, 1338-1339.
Fiscal Affairs Department
International Monetary Fund
700 19th Street, NW
Washington DC 20431