1. Fiscal Policy for Poverty Reduction, Reconstruction, and Growth
- Author:
- Matthew Smith, Alan Roe, and Tony Addison
- Publication Date:
- 06-2006
- Content Type:
- Policy Brief
- Institution:
- United Nations University
- Abstract:
- An effective state is able to mobilize revenue and spend it on infrastructure, services, and public goods that both enhance human capital and the well-being of communities (especially the poor), as well as stimulating investment and employment creation by the private sector. An effective state also manages public finance to ensure that macroeconomic balance is maintained—with policy neither too restrictive to discourage private investment and growth, nor too accommodative to create high inflation and crowd out private investment. Fiscal issues are therefore at the heart of the state's role in the development process and failure in this policy area—whether it is in taxation, public expenditures, or in managing the fiscal deficit and public debt—can quickly undermine growth and poverty reduction. Fiscal weakness can also be fatal to social peace when one or more ethnic, religious, or regional groups are taxed unfairly—or receives too little in the allocation of public spending.
- Topic:
- Debt, Development, Economics, and Poverty
- Political Geography:
- Africa and Asia