Fiscal Policy for Development

CHRISTOPHER S. ADAM Research Associate, Department of Economics, Centre for the Study of African Economies, University of Oxford, UKDAVID L. BEVAN Lecturer in Economics, University of Oxford, UKSONIA BHALOTRA Reader in Economics, University of Bristol, UKABDUR R. CHOWDHURY Director, Economic Analysis Division, United Nations Economic Commission for Europe, Switzerland MICK FOSTER Mick Foster Economics Ltd., UKADRIAN FOZZARD Senior Public Sector Specialist, Poverty Reduction and Economic Management Sector Unit, East Asia and Pacific Region, World Bank, USANORMAN GEMMELL Professorial Research Fellow, School of Economics, University of Nottingham, UKCHRISTOPHER HEADY Head of Tax Policy and Statistics, OECD, FranceNIELS HERMES Associate Professor, Department of Financial Management, University of Groningen, The NetherlandsRAGHBENDRA JHA Rajiv Gandhi Chair Professor and Executive Director, Australia South Asia Research Centre, Australian National University, AustraliaROBERT LENSINK Professor of Finance and Financial Markets, University of Groningen, The NetherlandsS. MANSOOB MURSHED Associate Professor of Development Economics, Institute of Social Studies, The NetherlandsMARK MCGILLIVRAY Senior Research Fellow and Project Director, UNU-WIDER, FinlandANDREW MCKAY Professor of Economics, University of Bath, UKOLIVER MORRISSEY Director, Centre for Research in Economic Development and International Trade (CREDIT), University of Nottingham , UKLEONCE NDIKUMANA Associate Professor, University of Massachusetts, USARITVA REINIKKA Research Manager, Development Research Group, World Bank, USAJAKOB SVENSSON Research Fellow, Institute for International Economic Studies, Stockholm University, Sweden

'It seems that with each new book it issues, UNU-WIDER further establishes its reputation as the intellectual leader among international organisations.' - John Weeks, Professor of Development Economics, SOAS, University of London, UK 'This is a very timely book. It represents the most comprehensive treatment to date of ways to achieve the Millennium Development Goals of poverty reduction, while at the same time maintaining the ongoing objectives of macro stabilization, accelerating growth and institutional reform. The result is a comprehensive and authoritative overview of a balanced approach to designing a poverty reduction fiscal policy programme. UNU-WIDER continues to set the agenda for development policy research for the new millennium.' - Robin Boadway, Professor, Department of Economics, Queen's University, Canada 'This book stands out in two ways. First, this is cutting edge research. The list of authors reads as a Who's Who? in the field of fiscal policy analysis in developing countries and the quality of the contributions is very high. Second, the volume moves well beyond the traditional topics. Novel issues include the design of new tax systems when the state is very weak, the fiscal implications of war, assessing the impact of fiscal policy on poverty, and the effect of tax choices on economic growth.' - Jan Willem Gunning, Professor, Free University, Amsterdam, The Netherlands 'Fiscal policy is a core ingredient of adjustment policy in developing countries be it adjustment to liberalisation, post-conflict reconstruction or growth promotion. This volume contains an excellent collection of studies which probe all aspects of fiscal policy. It should prove to be an invaluable reference for students, researchers and analysts.' - David Greenaway, Professor, School of Economics, University of Nottingham, UK 'This volume represents a clear, in-depth analysis of many aspects of fiscal policy and its relationship to the development of poor countries. The book consists of high-quality contributions by authors who are recognised experts in their fields. The coverage of topics is very comprehensive indeed...ranging from the macroeconomics to the microeconomics of fiscal policy, and from public expenditure management through to taxation policy. The volume also tackles major issues of current concern head-on, such as the impact of fiscal policy on poverty and the fiscal policy implications of conflict and reconstruction. By so clearly synthesising the results of the latest research and identifying the main unresolved questions the book is bound to stimulate a more informed debate. I strongly recommend this exciting book to graduate students, researchers and policymakers alike.' - Jeffery Round, Professor, University of Warwick, UK 'Researchers and policy analysts will find this book to be an excellent basis for thinking about a number of difficult fiscal, tax, and budgetary issues facing developing economies. The readings are of high quality and relevant to current policy analysis. The papers contained in this book scream out to policy makers as to why better budgetary practices as outlined in this book are not commonly adopted throughout the world.' - Jack Mintz, President and CEO, C.D. Howe Institute, Toronto, Canada 'Sustainable development in low-income countries cannot occur without a prior improvement of their fiscal institutions. This important book analyses thoroughly the various facets of this problem, and makes some definite contributions that will help the development community redirect its analytical efforts in the right direction.' - Jean-Paul Azam, Professor, Universite de Sciences Sociales, Toulouse, France '...all in all an excellent collection of papers.' - Andrew Mold, Journal of International Development

• Introduction; T.Addison & A.Roe The Macroeconomics of Fiscal Policy in Developing Countries; R.Jha Fiscal Policy Design in Low-Income Countries; C.S.Adam & D.L.Bevan Fiscal Effects of Aid; M.McGillivray & O.Morrissey Changing Approaches to Public Expenditure Management in Low-income Aid Dependent Countries; A.Fozzard & M.Foster Taxation Policy in Low-Income Countries; C.Heady Fiscal Policy in a Growth Framework; N.Gemmell Fiscal Policy and Private Investment in Less Developed Countries; N.Hermes & R.Lensink Assessing the Impact of Fiscal Policy on Poverty; A.McKay Efficiency of Public Spending: New Microeconomic Tools to Assess Service Delivery; R.Reinikka & J.Svensson Welfare Implications of Fiscal Reform: The Case of Food Subsidies in India; S.Bhalotra The Fiscal Dimensions of Conflict and Reconstruction; T.Addison, A.R.Chowdhury & S.Mansoob Murshed Fiscal Policy, Conflict, and Reconstruction in Burundi and Rwanda; L.Ndikumana