Template-type: ReDIF-Paper 1.0
Author-Name: Sally Wallace
Author-Email:swallace@gsu.edu
Author-Homepage: http://aysps.gsu.edu/WallaceS.html
Author-Workplace-Name:Andrew Young School of Policy Studies, Georgia State University	
Author-Workplace-Homepage:http://aysps.gsu.edu/index.html
Title: Fiscal Architecture and the Analysis of Public Expenditure Needs and Revenue Capacity   
Abstract:Powerful economic, demographic, and institutional and technological changes are 
 occurring throughout the world. The concentration of world population has moved from 
 the developed to the developing economies, the distribution of income in most countries 
 has become increasingly disparate, some developing countries are witnessing unprecedented 
 increases in the percent of elderly--others in the young. The natural growth rate in population 
 is 1.4 percent per year worldwide; but developing countries populations are growing much more 
 quickly than the populations of developed countries (1.7 percent versus 0.1 percent). 
 According to population projections, the developing countries will increase their share 
 of world population from 81.67 percent in 2000 to 86.2 percent in 2050. These changes 
 imply pressures for public expenditures that are different depending on the type of economic 
 and demographic change occurring. At the same time, the capacity of traditional revenue sources 
 is affected by similar factors.These changes are largely beyond the control of any country, 
 but they cannot be ignored in the development of any effective fiscal policy. 
 Nor can the institutional factors that govern a country and the technological changes faced 
 by all countries. These factors affect anti-poverty policy as well as more general fiscal policy.
 This is because, when taken together, these forces define the "fiscal architecture" of 
 a poor country's expenditure needs and its revenue-producing potential. As such, they 
 establish the framework for developing polices that make "fiscal sense" in defining 
 a society's practical options for policy design and implementation. A simple example 
 is as follows. A country in which property rights are not well establish and will not 
 be for a number of years would be ill-advised to count on a market-based property tax 
 to generate stable revenues in the near future. The importance of recognizing these 
 parameters and the opportunities they provide for (and the limitations they place on) 
 policymakers has been magnified in the past decade, as the pace of globalization of 
 markets for products and services has accelerated sharply. Understanding how the new 
 trends may affect the rate of growth in revenue collections and change the composition of 
 client populations may enable policy makers to redesign expenditure programs and revenue 
 instruments to stabilize a country's long-term finances. 
Keywords: Fiscal Architecture, Public Expenditure ,Revenue Capacity
Length: 57 pages
Creation-Date: 2001-10-01
File-URL:http://icepp.gsu.edu/files/2015/03/ispwp0111.pdf
File-Format:Application/PDF
Handle: RePEc:ays:ispwps:paper0111