Fiscal Affairs Department - International Monetary...

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AT A G L A N C E, 2 0 1 1 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 F iscal Affairs Department

Transcript of Fiscal Affairs Department - International Monetary...

Page 1: Fiscal Affairs Department - International Monetary Fundblog-pfm.imf.org/files/fad-brochure-2011.pdf · Senhadji, Victoria Perry, Brian Christensen, Gerd Schwartz, Michel Lazare, Juan

A t A G l A n c e , 2 0 1 1

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

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Allocation of Key FAD Outputs in Fiscal Year 2011

Technical AssistanceIMF financed

(34%)

Technical Assistanceexternally financed

(29%)

Monitoringglobal, regional, andcountry monitoring

(22%)

Support ofIMF-supported Programs

(8%)

Advise member countries on fiscal policies

(6%)

Other(1%)

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Fiscal Affairs Department

iscal policy affects macroeconomic stability, growth, and income distribution. 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. Its recent work has contributed to the discussion on 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 covering 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, the United States, and other donors supporting the IMF’s Regional Technical Assistance Centers (RTACs) and two recently established Topical Trust Funds (TTFs).

F

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Senior Management. First row from left to right: Kentaro Ogata, Paolo Mauro, Martine Guerguil, Carlo Cottarelli, Adrienne Cheasty, Marco Cangiano, Julio Escolano, Sanjeev Gupta (photo illustration). Second row: Philip Gerson, Benedict Clements, Abdelhak Senhadji, Victoria Perry, Brian Christensen, Gerd Schwartz, Michel Lazare, Juan Toro, Kiyoshi Nakayama, Michael Keen.

FAD staff.

Fiscal Affairs Department

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FAD supports the IMF’s interactions with member countries by assigning some 50 fiscal economists

to IMF surveillance and program teams. More countries are covered through ad hoc participation in area department missions. In addition to analyzing broad fiscal developments, these economists conduct in-depth analysis of macrofiscal and structural fiscal issues in the countries to which they are assigned. In carrying out their tasks, FAD economists draw on the extensive fiscal expertise of FAD as a whole. Their analysis forms part of the IMF staff ’s reporting on the member countries concerned.

FAD provides technical assistance (TA) to member countries to enhance both their fiscal performance and strengthen their fiscal institutions. The bulk of FAD TA is provided in four areas:

■ Public financial management: legal and regulatory framework, budget management, medium-term expenditure framework, cash management, accounting, reporting, and debt management.

■ Tax policy: general tax policy reviews and specific tax policy advice, particularly in the areas of income tax, value-added tax, and taxation of natural resources, including oil and gas.

■ Revenue administration: tax and customs administration, social security contribution collection, and implementation of major tax policy changes.

■ Expenditure policy: short-term expenditure rationalization, social security reform and administration, and incorporation of cost-effective social safety nets into IMF-supported programs.

In addition, assistance is provided in macrofiscal management, public-private partnerships, fiscal risks, fiscal rules, fiscal transparency, and fiscal decentralization.

FAD’s Policy Work

FAD is the source of a wealth of policy-oriented analytical work, which is disseminated in

several ways.

A key publication is the IMF Fiscal Monitor, which is part of the IMF’s World Economic and Financial Surveys. Issued twice a year (with interim quarterly updates), the Fiscal Monitor provides a comprehensive assessment of fiscal developments and prospects globally and for various country groupings, including advanced and emerging economies.

FAD staff also produce other cross-country policy analysis, including papers for the IMF’s Executive Board, Staff Discussion Notes, Working Papers, Occasional Papers, Technical Notes and Manuals, and books (available on the IMF’s website: www.imf.org), as well as contributions to major economic and public finance journals.

As part of its contributions to the global economic policy dialogue, FAD organizes a number of conferences and seminars each year. Chief among them is the Fiscal Forum (http://www.imf.org/external/np/seminars/eng/2011/fiscal/), which is held once a year and draws high-level policy makers from a cross-section of IMF member countries. FAD staff also participate in international conferences and meetings where they present the department’s analysis and research.

FAD issues an e-newsletter quarterly to inform officials in member countries of its analytical and research work. Readers can subscribe by sending a request to [email protected]. FAD also maintains a Public Financial Management blog (http://blog-pfm.imf.org), which has a wide readership among officials and academics, and FAD’s Director, Carlo Cottarelli, is a regular blogger on iMFdirect (http://blog-imfdirect.imf.org).

FAD at Work

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FAD at Work

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Technical Assistance Delivery

FAD’s TA activities take different forms and are tailored to the circumstances of each member

country. Missions from headquarters constitute an important element of FAD’s TA. These missions work with the authorities (and other TA providers) in ana-lyzing the sources of weakness in fiscal institutions and drawing up an action plan to remedy these weaknesses. They also provide advice on fiscal policy design and implementation and help the authorities monitor the implementation of fiscal reforms. A report on findings and recommendations is provided to the authorities at the end of each mission. These reports are prepared for the authorities and shared only with the World Bank, but encouraged by the IMF, the authorities of the member country themselves may decide these reports should be more widely distributed. FAD TA also includes stand-alone expert assignments that assist countries in implementing mission recommendations. They can be resident, short-term, peripatetic (i.e., repeat visits), or be fielded from the IMF’s Regional Technical Assistance Centers (RTACs). The distribution of mis-sions and follow-up assistance through expert assign-ments is shown on the following two world maps.

FAD’s TA has been vital in countries affected by the recent global financial crisis. Intensive TA has been pro-vided in a number of policy areas critical to helping these countries respond and recover from the crisis. Examples include:

■ rationalizing government expenditures in the short run and strengthening pension systems (Belarus, Greece, Lithuania, and Serbia);

■ developing medium-term fiscal frameworks to tighten budget execution and expenditure controls, and im-prove cash and debt management (Greece, Iceland, Latvia, Poland, Romania, and Serbia);

■ identifying tax policy options (Greece, Iceland, and Latvia); and

■ fortifying tax administration in response to sharp crisis-related revenue declines (Greece, Hungary, Lat-via, Lithuania, and Ukraine).

This kind of TA has highlighted characteristics unique to FAD and IMF TA. First, such TA can respond quickly to urgent government requests—with specialized teams often in the field on short notice and sometimes ahead of other IMF operations. Second, the technical diagnostics and remedial recommendations can provide input to the design of IMF-supported programs.

TA provided by Regional Technical Assistance Centers (RTACs). To help deliver effective follow-up assistance and support implementation of reforms proposed by missions from headquarters, the IMF has a network of eight RTACs covering about 90 countries in the Pacific (PFTAC), the Caribbean (CARTAC), East, West, Cen-tral, and Southern Africa (AFRITAC East, AFRITAC West, AFRITAC Central, and AFRITAC South), the Middle East (METAC), and Central America (CAP-TAC). Two additional centers are planned, which will cover countries in Central Asia and in Anglophone West Africa. Through a team of resident advisors, supplement-ed by short-term experts, each RTAC provides TA in the core areas of the IMF’s expertise, including macrofiscal, public financial management, and revenue administration. Their work is part of FAD’s TA program and is subject to the same rigorous supervision and quality control as headquarter-led activities.

Topical Trust Funds. The IMF has launched two multi-donor topical trust funds supporting TA to members in Tax Policy and Administration (TPA TTF) and Manag-ing Natural Resource Wealth (MNRW TTF). The assistance financed through these trust funds benefits from the IMF’s technical assistance infrastructure and proven expertise. It also provides a vehicle for donor coor-dination and commissioning focused policy development in these areas.

FAD at Work

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FAD at Work

Fiscal MonitorFAD launched the Fiscal Monitor in 2009 to moni-tor and analyze the latest public finance developments worldwide, update fiscal implications of the crisis and medium-term fiscal projections, and assess policies to put public finances on a sustainable footing.

The Fiscal Monitor has become the IMF’s third cross-country flagship publication, joining the World Eco-nomic Outlook (WEO) and the Global Financial Stability Report (GFSR). Two full reports are prepared each year together with two quarterly Updates. The Fiscal Monitor’s projections are based on the same database used for the WEO and GFSR. The publica-tion is available at: http://www.imf.org/external/ns/cs.aspx?id=262.

In addition to analyzing and surveying fiscal develop-ments, the Fiscal Monitor also identifies new medium-term fiscal challenges and provides policy options. For example, past reports included research on spending pressures arising from health care entitlements and reforms needed to contain these costs. Another study focused on the emerging risks to fiscal transparency, as temptations rise to supplement genuine fiscal adjust-ment with accounting stratagems. In addition, rec-ommendations were provided on how to tap the full potential of the value added tax (VAT) as an efficient way to raise revenues.

Macrofiscal Analysis

FAD’s macrofiscal work includes both cross-coun-try analysis and monitoring, research on emerg-

ing fiscal issues, and macrofiscal analysis support at the individual country level. The latter is achieved by assignment of FAD staff to area department teams to help analyze key policy issues.

In addition, FAD offers TA on various macrofiscal issues, including:

Macrofiscal modeling and improvement of forecasts used for fiscal policy formulation and budget preparation.

Macroeconomics and fiscal position, including analyz-ing the impact of changes in the macroeconomic environ-ment on the fiscal position, the impact of fiscal policy on macroeconomic outturn, the sustainability of fiscal policies and the design of fiscal adjustment plans, as well as fiscal-financial linkages and strengthening the coordi-nation of monetary and fiscal policy.

Guidance on fiscal policy formulation, including defin-ing the role of fiscal objectives and targets, managing government assets and liabilities and, in some countries, designing fiscal rules, stabilization and savings mecha-nisms, and independent fiscal institutions.

Organizational aspects of the macrofiscal function, including defining the roles and responsibilities of min-istries of finance, strengthening their capacity to carry out the macrofiscal function, and designing a macroeco-nomic unit.

Expenditure ceilings, including advice on the appropri-ate expenditure envelope from a short-, medium-, and long-term perspective.

Fiscal risk assessment, disclosure, and management, , including 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 macrofiscal work.

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Figure 1. Debt Ratios in Selected Advanced Economies, 1791-2009(Percent of GDP)

Source: FAD Historical Public Debt Database

United States

Germany

Japan

0

20

40

60

80

100

120

140

160

180

200

220

1791 1806 1821 1836 1851 1866 1881 1896 1911 1926 1941 1956 1971 1986 2001 2009

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FAD Historical Public Debt DatabaseFAD has compiled a comprehensive dataset of gross government debt in percent of GDP, covering a very large number of countries—nearly the entire Fund membership—and an exceptionally long time period. The database covers 174 countries, starting from 1880 for most G-7 countries and a few other advanced and emerging economies and from 1920 for most remaining advanced and emerging economies. For low-income countries (LICs), data were available mainly after 1970. The dataset was compiled by bringing together a number of databases compiled by individual researchers, as well as information from the League of Nations or the United Nations. As an example, Figures 1 and 2 show the evolution of debt ratios for Germany, Japan, and the United States and for Argentina, Thailand, and Turkey, respectively. For the most recent years, entries are linked to the World Economic Outlook (WEO) database to allow for regular updates. The link to the dataset and the accompanying working paper (WP/10/245) are available on imf.org at: http://www.imf.org/external/ns/cs.aspx?id=262.

Macrofiscal Analysis

Source: FAD Historical Public Debt Database

Argentina

Thailand

Turkey

0

20

40

60

80

100

120

140

160

180

1884 1894 1904 1914 1924 1934 1944 1954 1964 1974 1984 1994 2004 2009

Figure 2. Debt Ratios in Selected Emerging Economies, 1880-2009(Percent of GDP)

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What Failed and What Worked in Past Attempts at Fiscal AdjustmentA new FAD book informs the public debate on how to ensure successful fiscal adjustment in advanced economies in the years ahead, through a systematic analysis of how past adjustment plans fared in advanced economies. Although today’s circumstances may be different from those experienced in the past, history may nevertheless provide useful guidance to learn from past successes.

This analysis changes the way we look at fiscal adjustment, by focusing on large, ex-ante adjustment plans, rather than selecting episodes based on actual, ex-post outturn data. The empirical analysis then tracks ex-post outcomes compared with ex-ante plans, looking at the extent to which macroeconomic variables (growth, interest rates, etc.) deviated from those projected at the time when the plans were drawn up. It also looks at whether spending exceeded expectations, or revenues fell short of expectations, and why, as well as whether, planned debt reductions proceeded faster or slower than projected in the plan.

The book includes case studies for each of the G7 countries and a cross-country statistical analysis of large fiscal adjustment plans by European Union (EU) countries. The sample was selected on an ex-ante basis, leading to the construction of a comprehensive database with all the three-year “convergence” or “stability and growth” programs produced by each EU country for every year over the past couple of decades. A concluding chapter summarizes policy lessons learned.

Chipping Away at Public Debt—Sources of Failure and Keys to Success in Fiscal Adjustment, ed. by P. Mauro (Wiley, 2011).

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40%

35%

16%

9%

Western Hemisphere Region

36%

37%

22%

5%

Africa Region

31%

31%

27%

11%

Middle East and Central Asia Region

40%

24%

27%

9%

Asia and Pacific Region

45%

30%

12%

13%

European Region

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Technical Assistance Missions from the Fiscal Affairs Department

Policy Advice and Development of Fiscal Reforms and Action Plans

TA mission intensityNumber of Missions, FY2009-FY2011

No missionsLow: 1-2Medium: 3-4High: 5 or more

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40%

35%

16%

9%

Western Hemisphere Region

36%

37%

22%

5%

Africa Region

31%

31%

27%

11%

Middle East and Central Asia Region

40%

24%

27%

9%

Asia and Pacific Region

45%

30%

12%

13%

European Region

9

Topical distribution of TA missions by regionFY2009-FY2011

Revenue AdministrationPublic Financial ManagementTax PolicyOther

Size of pie indicates volume of TA.

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38%

58%

4%

Africa Region

60%40%

European Region

67%28%

5%

Western Hemisphere Region

43%

2%

55%

Middle East and Central Asia Region

48%

52%

Asia and Pacific Region

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Medium and Long-term Assistance through Expert Assignments and Support

ANTIGUA AND BARBUDA

GRENADA

ST. KITTS AND NEVIS

ANGUILLA

ST. LUCIAST. VINCENT AND THE GRENADINES

BELIZEHONDURAS

SURINAME

TRINIDAD AND TOBAGO

REPUBLICDOMINICAN

BAHAMAS

BERMUDA

TURKS & CAICOS

DOMINICA

MONTSERRATJAMAICA

EL SALVADOR

PANAMA

COSTA RICA

GUATEMALA

CAYMANISLANDS

BARBADOS

GUYANA

HAITI

Strengthening Institutions and Fiscal Management Capacities

Intensity of expert and RTAC TA deliveryIn person years, FY2009-FY2011

No TALow: less than 0.5Medium: 0.5 - 1.5High: more than 1.5Member of an RTAC

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38%

58%

4%

Africa Region

60%40%

European Region

67%28%

5%

Western Hemisphere Region

43%

2%

55%

Middle East and Central Asia Region

48%

52%

Asia and Pacific Region

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from Regional Technical Assistance Centers (RTACs)

Topical distribution of expert and RTAC delivery by regionFY2009-FY2011

Public Financial ManagementTax Policy and Revenue AdministrationOther

Size of pie indicates volume of TA.

TIMORL’ESTE

PAPUANEW GUINEA

SOLOMONISLANDS

PALAU

NAURU

MARSHALLISLANDS

FEDERATED STATES OF MICRONESIA

COOK ISLANDS

KIRIBATI

FIJI

TONGA

SAMOA

NIUE

TUVALU

VANUATU

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Tax Policy

FAD provides support to enhance the efficiency, fairness, and productivity of tax systems. FAD’s

advice covers the design and implementation of reforms of corporate and personal income taxes, taxes on capital income and financial institutions, VAT and other indirect taxes, and local property taxes. Recent work includes:

Taxes and the global financial crisis. FAD has extensively analyzed the interactions of tax policy and the financial crisis and is now focused on assessing and advising countries regarding the tax policy aspects of “exit strategies” to restore fiscal sustainability. This is reflected in both policy work and current TA to member countries.

Natural resource revenues and management. Advice is centered on the establishment of sound fiscal regimes and transparent frameworks for resource revenue management (mining, oil, natural gas, and large agriculture and forestry projects). The department has developed financial models to help governments assess the impact of variations in prices, extraction amounts, and regime designs.

Tax coordination, customs unions, and tax incentives. Increased trade and capital mobility, amplified by regional trade arrangements, necessitate improved tax coordination. FAD assists customs unions and other regional organizations in this area.

Financial markets and instruments. The department provides advice on the taxation of financial instruments and institutions, as well as the tax aspects of capital market development.

Fiscal implications of climate change. FAD analyzes fiscal responses to climate change, working with other organizations such as the UN, the EU, and the World Bank.

Revenue Mobilization in Developing Countries A core challenge for many developing countries is to improve their domestic revenue mobilization—to raise more, in ways that are more efficient and fairer and better promote good governance.

FAD has recently organized two conferences to bring together leading policy makers and academics, busi-ness, and civil society to improve decisions and advice by learning from successes and failures of the past and from most recent academic advances. These conferenc-es complemented FAD’s ongoing technical assistance and advice, through which FAD works to improve the expertise and technical capacity of Fund members, in particular low-income countries. The conferences also responded to the G-20 initiative on enhancing revenue mobilization in developing countries.

On the first conference, co-hosted by Kenya, Kenya’s Deputy Prime Minister and Minister for Finance, Uhuru Kenyatta, said, “This is a good opportunity for sub-Saharan African countries to reflect on their tax policy and administration regimes as they chart the way forward to become more self reliant in resource mobilization to fund their pressing spending needs.” Topics in the two conferences covered both tax policy and revenue mobilization and ranged from efforts to enhance governance to opportunities arising from regional integration. Country officials also discussed challenges in the taxation of natural resources as well as reforms in business taxation.

The second conference also marked the launch of two multi-donor Topical Trust Funds that aim to enhance capacity to deliver technical assistance on revenue mo-bilization and natural resource management in low- and lower-middle income countries, using the Fund’s technical assistance expertise and infrastructure.

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Revenue Administration

Former Yugoslav Republic of Macedonia

ChallengeThe implementation of a major tax reform program, which focused on integrating the collection of social insurance contributions (SIC) and personal income tax (PIT) into a single revenue collection agency. Prior to the reform program, four separate agencies had been responsible for collecting the PIT (the Public Rev-enue Office, PRO) and the SIC (three social insurance funds), which posed high costs for the government, employers, and employees.

ApproachThe earlier stages of the reform emphasized strengthening the PRO to the point that it could successfully take responsibility for collecting the SIC on behalf of the social insurance funds. Building on the good results, the PRO and the insurance funds prepared for integrated collection by harmonizing the bases of the SIC and PIT and aligning administrative procedures and information technology systems. Through these efforts the PRO began collecting the insurance contributions on January 1, 2009. Since then, the authorities have consolidated the reforms and further enhanced the PRO’s revenue collection capacity, including by implementing a combined social contributions and personal income tax audit program.

ResultsIntegrated collection has yielded substantial benefits for:

■ the government through increased SIC collections, despite the economic downturn and reductions in contributions rates,

■ employees through more prompt payment of wages, because mechanisms for stronger enforcement of SIC payment also reduced delays in paying wages, and

■ employers through significant harmonization of tax and contributions bases and unification of adminis-trative procedures.

Modernizing revenue administration is a key strategy in many countries. FAD provides TA

in tax and customs administration to help design re-form strategies to achieve optimal revenue levels at the lowest administrative and compliance cost.

Revenue administration management and organization. FAD tailors reforms aimed at administrative effectiveness and efficiency to country circumstances. This includes an effective headquarters that provides strategic planning and monitors field office activities against clear performance measures, and appropriate reform management arrangements to ensure success.

Tax administration. TA includes guidance to improve management and performance of specific taxes (VAT, income taxes, excises, and social contributions). It devel-ops segmentation strategies for different taxpayer groups, such as large business tax administration, and simplified regimes for small businesses. Assistance is also provided to strengthen core functions (e.g., audit, enforcement, filing and payment), based on voluntary compliance, taxpayer self-assessment, effective taxpayer services and well-designed IT strategies.

Customs administration. FAD TA reflects the interna-tional standards established by the World Customs and World Trade Organizations as well as the requirements of regional agreements. Many low-income countries rely on revenues from import taxes and duties, even as they un-dertake trade facilitation reforms to reduce costs and in-crease export competitiveness. FAD TA strategies balance both objectives by strengthening legislative and regulatory controls and simplifying procedures and improving basic revenue assessment and collection.

Skopje, Macedonia.

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Strong Public Finance Management (PFM) systems are key to ensuring effective delivery of

intended budget policies. FAD’s TA in the PFM area focuses on:

Comprehensive assessment of PFM systems. FAD pro-vides in-depth, diagnostic analysis of the efficiency, effec-tiveness, and transparency of PFM systems, through in-struments such as TA missions, reports on the observance of standards and codes (ROSCs), and public expenditure and financial accountability (PEFA) assessments.

Basic PFM systems. Advice is provided to member countries to enhance the budget as the central instru-ment for fiscal management and the allocation of public resources. Issues treated include: budget coverage, partic-ularly the integration of extra-budgetary and quasi-fiscal activities; the budget formulation process; treasury sys-tems; expenditure and revenue classification; accounting and fiscal reporting; cash management and commitment control; and internal control and audit.

Kenya

ChallengeIn August 2010, the Kenyan people voted a new Constitution with significant changes to governance and financial management arrangements—presidential system, independent judiciary, devolution, new oversight institutions—and a tight schedule for drafting enabling laws. The authorities sought FAD advice on legal changes in the area of public financial management (PFM).

ApproachFAD responded in January 2011 with a mission funded through AFRITAC East, which proposed a detailed outline of a comprehensive new PFM law based on international best practice. Building on earlier work and consulting with key stakeholders, it provided specific guidance to meet key constitutional provisions: increased transparency and accountability; earlier submission of budget to Parliament; new institutions of Controller of the Budget and Commission on Revenue Allocation; devolved governments; and financial control responsibilities assigned to the treasury. AFRITAC East provided follow-up support to the drafting team established by the authorities, with desk-based supervision from FAD.

Results ■ Quick response from FAD and AFRITAC East

helped the authorities to proceed efficiently with this onerous task.

■ The new law sets a model for others to follow, particularly within the East African Community.

■ Early involvement of Parliament and Auditor General will reduce objections in final stages of approval.

Public Financial Management

Nairobi, Kenya

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Peru

ChallengeThe Ministry of Economy and Finance (MEF) of Peru sought to adapt its structures to a rapidly chang-ing environment and modernize its business processes in order to provide services more efficiently to its main clients (mostly other ministries).

ApproachFAD has helped MEF to achieve these objectives since 2007 through a programmatic approach that included headquarters missions, a resident long-term advisor, short-term experts, seminars and workshops, and advice by a team of external experts. The various TA inputs led to the adoption of new tools and practices in the Ministry, especially in treasury management, and to the complete reorganization of the Ministry, which took place in March 2011. The TA has been financed by the governments of Japan and Switzerland.

ResultsThe main outputs so far are:

■ Streamlining and modernizing MEF organization: the Treasury and Debt Directorates were merged and a risk management function was introduced; functions such as banking regulation, productivity and competition and pension policies were allocated to different Directorates; and all administrative activities were consolidated in one Directorate.

■ Improving treasury management, including increase in coverage of the treasury single account and better cash planning.

These results are expected to improve the coordination between fiscal and monetary policy, cash and debt management, and budget management and control.

Lima, Peru

More advanced reforms. Depending on the level of development in a member country, FAD pro-

motes the adoption of best practices, such as integrating the budget into a medium-term fiscal and budgeting framework; program and performance budgeting; and accrual accounting.

Legislative and regulatory drafting. The department assists in preparing budget system laws and fiscal respon-sibility legislation in cooperation with the IMF’s Legal Department.

Restructuring of central finance agencies. FAD pro-vides expertise in the re-organization of state treasuries, debt and cash management offices, and advises how to reshape a ministry of finance as a whole to become an effective manager of public resources.

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Analytical Work and TA on Age-Related SpendingFAD’s research paper, From Stimulus to Consolidation: Revenue and Expenditure Policies in Advanced and Emerging Economies, set out general considerations for balancing revenue and spending measures to achieve fiscal consolidation and included an assess-ment of reform options for public spending. The paper highlighted the growing trend of public debt, especially in advanced economies, and provided new projections for age-related spending in a large num-ber of advanced and emerging economies.

A paper entitled Macro-Fiscal Implications of Health Care Reform in Advanced and Emerging Economies analyzed developments in public health spending over the past 40 years, provided long-term projec-tions for advanced and emerging countries, discussed the effects of specific health reforms on public health spending in advanced economies, and examined the challenges facing emerging economies as they seek to expand coverage of health care in a fiscally sus-tainable manner. A technical manual, Health Care Spending Issues in Advanced Economies, was prepared in 2010. The department is currently working on a book, Searching for a Cure: Fixing Public Health Care Finances in Advanced and Emerging Economies, which will provide new insights on the challenge of control-ling health care costs and potential policy responses with a combination of cross-country work and case studies. The book will include contributions from prominent scholars on health care reform.

Research on pensions has included a Staff Discussion Note, A Fiscal Indicator for Assessing First and Second Pillar Pension Reforms, and a working paper, Macro-economic Effects of Public Pension Reform. FAD is also currently working on revising its projections for pen-sion spending in advanced and emerging economies and reform options.

FAD’s research on age-related spending and outreach efforts have fed also into technical assistance work in such countries as Belarus, Bulgaria, Egypt, Georgia, Greece, and Moldova.

Expenditure Policy

The quality of spending has a direct bearing on growth and social development in IMF member

countries. FAD provides a range of analytical and advisory services in this area:

Expenditure efficiency. The department, where appropriate in close collaboration with the World Bank, provides advice on short-term expenditure rationalization, aimed at identifying sustainable ways of raising the efficiency of public spending. The demand for this advice has increased substantially in the wake of the global economic crisis in developing, emerging-market, and developed economies. Advice is provided on employee compensation, pensions and other social insurance, health and education spending, subsidies, and social assistance.

Equity and social spending. The department is engaged in work on the effects of fiscal policy on equity and the impact of Fund-supported programs on health and education spending.

Social safety nets. Advice is provided in incorporating cost-effective social safety nets during fiscal adjustment. This has included technical assistance and policy work on how to protect the poor during subsidy reform.

Public-private partnerships (PPPs). TA to member countries on PPPs aims at helping countries manage the fiscal risks of PPPs, in particular through strengthening institutional capacity and transparency.

Age-related spending. Fiscal consolidation efforts in advanced and emerging economies will require that countries confront spending pressures on public health and pensions. TA on pension reform and FAD’s policy work are helping countries meet this challenge.

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Selected Recent Publications

IMF Fiscal MonitorFiscal Monitor Update: Staying the Course on Fiscal

Adjustment, Fiscal Affairs Department, International Monetary Fund, Washington DC, June 2011.

Fiscal Monitor: Shifting Gears, Tackling Challenges on the Road to Fiscal Adjustment, Fiscal Affairs Department, International Monetary Fund, Washington DC, April 2011.

Fiscal Monitor: Fiscal Exit: From Strategy to Implementation, Fiscal Affairs Department, International Monetary Fund, Washington DC, October 2010.

IMF Staff Discussion NotesRaising the Consumption Tax in Japan: Why, When, How?

A Team led by M. Keen, M. Pradhan, Kang, and R. de Mooij, SDN/11/13, 2011.

Tax Biases to Debt Finance: Assessing the Problem, Finding Solutions, R. de Mooij, SDN/11/11, 2011.

A Fiscal Indicator for Assessing First and Second Pillar Pension Reforms, M. Soto, B. Clements, and F. Eich, SDN/11/09, 2011.

Long-Term Trends in Public Finances in the G-7 Economies, C. Cottarelli, and A. Schaechter, SPN/10/13, 2010.

IMF Books and Occasional PapersChipping Away at Public Debt, Sources of Failure and Keys

to Success in Fiscal Adjustment, edited by P. Mauro, Wiley, 2011.

From Stimulus to Consolidation: Revenue and Expenditure Policies in Advanced and Emerging Economies, B. Clements, V. Perry, and J. Toro, October 2010.

Strategies for Fiscal Consolidation in the Post-Crisis World, A. Abbas, O. Basdevant, S. Eble, G. Everaert, J. Gottschalk, F. Hasanov, J. Park, C. Sancak, R. Velloso, M. Villafuerte, September 2010.

The Taxation of Petroleum and Minerals: Principles, Problems, and Practice, edited by P. Daniel, M. Keen, and C. McPherson, Routledge, 2010.

Fiscal Risks: Sources, Disclosure, and Management, A. Cebotari, J. Davis, L. Lusinyan, A. Mati, P. Mauro, M.

Petrie, and R. Velloso, International Monetary Fund, Washington DC, 2009.

Fiscal Implications of the Global Economic and Financial Crisis, Occasional Papers No. 269, Washington DC, 2009.

Fiscal Management of Scaled-Up Aid, S. Gupta, G. Schwartz, S. Tareq, R. Allen, I. Adenauer, K. Fletcher, and D. Last, International Monetary Fund, Washington DC, 2008.

Public Investment and Public-Private Partnerships: Addressing Infrastructure Challenges and Managing Fiscal Risks, G. Schwartz, A. Corbacho, and K. Funke, International Monetary Fund, Washington DC, 2008.

IMF Technical Notes and Manuals When and How to Adjust Beyond the Business Cycle? A

Guide to Structural Fiscal Balances, F. Bornhorst, G. Dobrescu, A. Fedelino, J. Gottschalk, and T. Nakata, No. 2, 2011.

Tax Policy: Designing and Drafting a Domestic Law to Implement a Tax Treaty, K. Nakayama, No. 1, 2011.

Developing a Taxpayer Compliance Program, B. Russell, No. 17, 2010.

Health Care Spending Issues in Advanced Economies, E. Jenkner and A. Leive, No. 16, 2010.

IMF Working PapersInternational Fuel Tax Assessment: An Application to Chile,

I. Parry and J. Strand, WP/11/168, 2011.

Revenue Administration Reforms in Anglophone Africa since the early 1990s, D. Kloeden, WP/11/162, 2011.

Reforming the Tax System to promote the Environmental Objectives: An Application to Mauritius, I. Parry, WP/11/124, 2011.

Assessing Fiscal Stress, E. Baldacci, I. Petrova, N. Belhocine, G. Dobrescu, and S. Mazraani, WP/11/100, 2011.

The Tax Elasticity of Corporate Debt: A Synthesis of Size and Variations, R. de Mooij, WP/11/95, 2011.

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Selected Recent Publications

Measuring Fiscal Vulnerability and Fiscal Stress: A Proposed Set of Indicators, E. Baldacci, J. McHugh, and I. Petrova, WP/11/94, 2011.

How Strong are Fiscal Multipliers in the GCC? An Empirical Investigation, R. Espinoza, and A. Senhadji, WP/11/61, 2011.

Taxing Financial Transactions: Issues and Evidence, T. Matheson, WP/11/54, 2011.

Macroeconomic Effects of Public Pension Reforms, P. Karam, D. Muir, J. Pereira, A. Tuladhar, WP/10/297, 2010.

A Status Update on Fiscal Exit Strategies, F. Bornhorst, N. Budina, G. Callegari, A. ElGanainy, R. Gomez Sirera, A. Lemgruber, A. Schaechter, J. Beom Shin, WP/10/272, 2010.

Should Advanced Countries Adopt a Fiscal Responsibility Law? I. Lienert, WP/10/254, 2010.

Post-Crisis Fiscal Policy Priorities for the ASEAN-5, N. Budina and A. Tuladhar, WP/10/252, 2010.

Riding the Roller Coaster: Fiscal Policies of Nonrenewable Resource Exporters in Latin America and the Caribbean, M. Villafuerte, P. Lopez-Murphy, R. Ossowski, WP/10/251, 2010.

Structural Breaks in Fiscal Performance: Did Fiscal Responsibility Laws Have Anything to Do with Them? C. Caceres, A. Corbacho, and L. Medina, WP/10/248, 2010.

A Historical Public Debt Database, S. Ali Abbas, N. Belhocine, A. ElGanainy, and M. Horton, WP/10/245, 2010.

Is Social Spending Procyclical? J. Arze del Granado, S. Gupta, A. Hajdenberg, WP/10/234, 2010.

Restoring Debt Sustainability after Crises: Implications for the Fiscal Mix, E. Baldacci, S. Gupta, C. Mulas-Granados, WP/10/232, 2010.

Estimates of the Output Gap in Armenia with Applications to Monetary and Fiscal Policy, A. ElGanainy, A. Weber, WP/10/197, 2010.

Fiscal Deficits, Public Debt, and Sovereign Bond Yields, E. Baldacci and M.S. Kumar, WP/10/184, 2010.

Automatic Stabilizers and the Size of Government: Correcting a Common Misunderstanding, C. Cottarelli and A. Fedelino, WP/10/155, 2010.

Papers in Academic JournalsPolitical and Fiscal Risk Determinants of Sovereign Spreads

in Emerging Markets, E. Baldacci, S. Gupta, and A. Mati, in Review of Development Economics, Volume 15, Issue 2, pages 251-63, May 2011.

Dynamics of International Integration of Government Securities’ Markets, M. Kumar and T. Okimoto, in Journal of Banking & Finance, January 2011.

Constricted, lame and pro-cyclical? Fiscal policy in the euro area revisited, A. Schaechter, S. Deroose, M. Larch, in International Journal of Sustainable Economy, Vol. 3, No. 2, 2011.

Corporate Tax Consolidation and Enhanced Cooperation in the European Union, L. Bettendorf, A. van der Horst, R. de Mooij, and H. Vrijburg, Fiscal Studies, Vol. 31, Issue 4, December 2010, pp. 453-79.

Fiscal Costs of Financial Sector Support: Measures and Implications, M. Kumar, D. Kim, in Nordic Economic Policy Review, Number 1/2010, November 2010.

Fiscal Policy and Macroeconomic Stability: New Evidence and Policy Implications, X. Debrun, and R. Kapoor, Nordic Economic Policy Review, Number 1/2010, November 2010.

Flat income taxation, redistribution and labor market performance, B. Jacobs, R. de Mooij, and K. Folmer, in Applied Economics, Vol. 42, Issue 25, November 2010, pp. 3209–20.

Macroeconomic effects of greater competition in the service sector, L. Forni, A. Gerali, and M. Pisani, in Macroeconomic Dynamics, October 2010.

An Applied Analysis of ACE and CBIT reforms in the EU, R. de Mooij, and M. Devereux, in International Tax and Public Finance, Volume 18, Number 1, pp. 93-120, June 2010.

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Marco CangianoAssistant Director and Division Chief,

Public Financial ManagementAnglophone Africa, the Middle East, and Europe

[email protected]

Michel LazareAssistant Director and Division Chief,

Public Financial ManagementAsia and the Pacif ic, Latin America, and

non-Anglophone countries in [email protected]

Martine GuerguilAssistant Director and Division Chief,

Fiscal Policy and [email protected]

Juan ToroDivision Chief, Revenue Administration

[email protected]

Victoria PerryDivision Chief, Tax Policy

[email protected]

Abdelhak SenhadjiDivision Chief, Fiscal Operations 1

[email protected]

Paolo MauroDivision Chief, Fiscal Operations 2

[email protected]

Benedict ClementsDivision Chief, Expenditure Policy

[email protected]

Julio EscolanoAdvisor

[email protected]

Kiyoshi NakayamaAdvisor

[email protected]

Kentaro OgataAdvisor

[email protected]

Brian ChristensenDivision Chief, Resource and Information Management

[email protected]

Carlo CottarelliDirector

[email protected]

Sanjeev GuptaDeputy Director

TA to [email protected]

Adrienne CheastyDeputy Director

TA to Western [email protected]

Gerd SchwartzSenior Advisor

TA to [email protected]

Philip GersonSenior Advisor

TA to Asia and Pacif ic [email protected]

Michael KeenSenior Advisor

TA to Middle East and Central [email protected]

Contacts

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Career OpportunitiesThe Fiscal Affairs Department (FAD) seeks talented and dedicated professionals, with a background in different areas of public finance, to work on macrofiscal policy issues and to provide technical assistance advice to IMF member countries on public financial management, tax policy reform, revenue administration, and different expenditure policy issues. Vacancies in FAD for staff and long-term expert positions are posted on http://www.imf.org/external/np/adm/rec/job/howtoap.htm.

FAD also seeks experts who are interested in occasional short-term (2-3 week) assignments. More information is available at http://www.imf.org/external/np/adm/rec/job/shortexp.htm and interested candidates may send their CVs to [email protected].

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f

On the Cover

Effects of Good Government

by Ambrogio Lorenzetti

Siena, Italy, 1338-1339.

DVD Content1. Voices from Senior Country Officials on Advisory Services

2. Africa Rebuilds: IMF Technical Assistance in Liberia

3. Back to the Future: A History of Global Debt

4. Chipping Away at Public Debt

Page 24: Fiscal Affairs Department - International Monetary Fundblog-pfm.imf.org/files/fad-brochure-2011.pdf · Senhadji, Victoria Perry, Brian Christensen, Gerd Schwartz, Michel Lazare, Juan

Fiscal Affairs Department

International Monetary Fund

700 19th Street, NW

Washington DC 20431