This paper discusses experiences in reestablishing fiscal management in postconflict countries. Building fiscal institutions in postconflict countries essentially entails a three-step process: (1) creating a legal or regulatory framework for fiscal management; (2) establishing or strengthening fiscal authority; and (3) designing appropriate revenue and expenditure policies while simultaneously strengthening revenue administration and public expenditure management. Based on experiences in 14 postconflict countries, the paper reviews the challenges in rebuilding fiscal institutions in these countries, and identifies key priorities in the fiscal area following the cessation of hostilities.
The information provided in this paper supplements the information presented in the main Board paper. The main paper discusses experiences in reestablishing fiscal management in post-conflict countries. On the basis of the Fiscal Affairs Department technical assistance recommendations to these countries, that paper identifies key priorities for rebuilding fiscal institutions in a post-conflict setting. This background paper provides more detailed information for the six selected countries—Afghanistan, Bosnia and Herzegovina, Democratic Republic of Congo (DRC), Lebanon, Mozambique, and Timor-Leste.
Clearing landmines, rehabilitating and integrating of excombatants, rebuilding the infrastructure, coordinating aid sources—these are just some of the issues confronting the Bank in post-conflict reconstruction. The explosion of civil conflicts in the post-Cold War world has tested the World Bank's ability to address unprecedented devastation of human and social capital.This study covers post-conflict reconstruction in nine countries, assessing relevant, recent Bank experience. It also presents case-studies for ongoing and future operations, which analyze: 1. the Bank's main strengths or comparative advantages; 2. its partnership with other donors, international organizations, and NGOs; 3. its role in reconstruction strategy and damage and needs assessment; 4. its role in rebuilding the economy and institutions of governance; 5. its management of resources and processes; 6. implications for monitoring and evaluation.
The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.
Post-conflict economic reconstruction is a critical part of the political economy of peacetime and one of the most important challenges in any peace-building or state-building strategy. After wars end, countries must negotiate a multi-pronged transition to peace: Violence must give way to public security; lawlessness, political exclusion, and violation of human rights must give way to the rule of law and participatory government; ethnic, religious, ideological, or class/caste confrontation must give way to national reconciliation; and ravaged and mismanaged war economies must be reconstructed and transformed into functioning market economies that enable people to earn a decent living. Yet, how can these vitally important tasks each be successfully managed? How should we go about rehabilitating basic services and physical and human infrastructure? Which policies and institutions are necessary to reactivate the economy in the short run and ensure sustainable development in the long run? What steps should countries take to bring about national reconciliation and the consolidation of peace? In all of these cases, unless the political objectives of peacetime prevail at all times, peace will be ephemeral, while policies that pursue purely economic objectives can have tragic consequences. This book argues that any strategy for post-conflict economic reconstruction must be based on five premises and examines specific post-conflict reconstruction experiences to identify not only where these premises have been disregarded, but also where policies have worked, and the specific conditions that have influenced their success and failure.
The Fund has long played a lead role in supporting developing countries’ efforts to improve their revenue mobilization. This paper draws on that experience to review issues and good practice, and to assess prospects in this key area.
Five years into the ongoing and tragic conflict, the paper analyzes how Syria’s economy and its people have been affected and outlines the challenges in rebuilding the economy. With extreme limitations on information, the findings of the paper are subject to an extraordinary degree of uncertainty. The key messages are: (1) that the devastating civil war has set the country back decades in terms of economic, social and human development. Syria’s GDP today is less than half of what it was before the war started and it could take two decades or more for Syria to return to its pre-conflict GDP levels; and that (2) while reconstructing damaged physical infrastructure will be a monumental task, rebuilding Syria’s human and social capital will be an even greater and lasting challenge.
Post-conflict economic reconstruction is a critical part of the political economy of peacetime and one of the most important challenges in any peace-building or state-building strategy. After wars end, countries must negotiate a multi-pronged transition to peace: Violence must give way to public security; lawlessness, political exclusion, and violation of human rights must give way to the rule of law and participatory government; ethnic, religious, ideological, or class/caste confrontation must give way to national reconciliation; and ravaged and mismanaged war economies must be reconstructed and transformed into functioning market economies that enable people to earn a decent living. Yet, how can these vitally important tasks each be successfully managed? How should we go about rehabilitating basic services and physical and human infrastructure? Which policies and institutions are necessary to reactivate the economy in the short run and ensure sustainable development in the long run? What steps should countries take to bring about national reconciliation and the consolidation of peace? In all of these cases, unless the political objectives of peacetime prevail at all times, peace will be ephemeral, while policies that pursue purely economic objectives can have tragic consequences. This book argues that any strategy for post-conflict economic reconstruction must be based on five premises and examines specific post-conflict reconstruction experiences to identify not only where these premises have been disregarded, but also where policies have worked, and the specific conditions that have influenced their success and failure.
This paper studies the role of fiscal policies and institutions in building resilience in sub-Saharan African countries during 1990-2013, with specific emphasis on a group of twenty-six countries that were deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, we use GMM estimation as well as a probabilistic framework to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as lower military spending and, to some extent, higher social expenditure, are significantly and fairly robustly associated with building resilience. Similar conclusions arise from a study of the progression of a group of seven out of the twenty-six sub- Saharan African countries that managed to build resilience after years of civil unrest and/or violent conflict. These findings suggest relatively high returns to focusing on building sound fiscal institutions in fragile states. The international community can help this process through policy advice, technical assistance, and training on tax administration and budget reforms.
