Georgia Public Expenditure Review : Selected Fiscal Issues
Georgia has an impressive growth record but social vulnerabilities persist. The current government has therefore made spending on social sectors and agriculture a high priority and has launched a decentralization reform to support regional inclusiv...
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| Format: | Report |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/09/25058737/georgia-public-expenditure-review-selected-fiscal-issues http://hdl.handle.net/10986/22674 |
| Summary: | Georgia has an impressive growth record
but social vulnerabilities persist. The current government
has therefore made spending on social sectors and
agriculture a high priority and has launched a
decentralization reform to support regional inclusive
growth. It remains a challenge to tackle social
vulnerabilities within a sustained macroeconomic framework.
The government has intensified its efforts to reduce social
vulnerability, as evidenced by the increase in social
spending from 7.1 percent of gross domestic product (GDP) in
2012, to 9.6 percent in 2014. As a result, the fiscal
deficit widened from 2.8 percent of GDP in 2012 to 3.0
percent in 2014. This public expenditure review (PER)
analyzes the impact of recent reforms including the social
programs that were either introduced or scaled up in 2013.
It gives an overview of the recent macroeconomic and fiscal
developments, including the fiscal implications of the
social programs in chapter one. As requested by the
government, it addresses three questions in the rest of the
report: (1) has the realignment of spending toward social
sectors resulted in better distributional outcomes; (2) have
the agriculture support programs been targeted at
productivity growth to support real incomes in poor rural
regions; and (3) what is the fiscal and equity impact of the
ongoing decentralization process? The first question is
addressed by combining micro household survey data with
administrative fiscal data to analyze the distributional
impact of both taxes and government spending on poverty and
inequality in Georgia in chapter two. The second question is
addressed by comparing the cost of new agriculture programs
with their estimated impact on agricultural productivity in
chapter three. Finally, the issue of regional inequalities
is partially addressed in this report by discussing three
different aspects of the current decentralization process:
the expected fiscal impact of decentralization, the need to
rationalize current capital grant programs to make public
investment more effective, and the implications of
introducing free preschool education administered at the
local government level in chapter four. |
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