Western Balkans Regular Economic Report, No. 16, Fall 2019 : Rising Uncertainties
Improving the efficiency and equity of public spending and strengthening revenue mobilization remains a priority in all Western Balkan countries. Public sector wage bills and pensions constitute the largest share of public spending in the region. T...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/643781570478210132/Rising-Uncertainties http://hdl.handle.net/10986/32532 |
| Summary: | Improving the efficiency and equity of
public spending and strengthening revenue mobilization
remains a priority in all Western Balkan countries. Public
sector wage bills and pensions constitute the largest share
of public spending in the region. Tighter controls on wage
bills, reducing tax expenditures, and better targeting of
social benefits would open space for more public investment,
improve equity, and enable the build-up of fiscal buffers to
mitigate rising risks. As outlined in this report, fiscal
rules can help anchor spending and fiscal sustainability.
However, their credibility in the region needs to be
restored after they have been repeatedly breached in some
countries. Fiscal management reforms are needed as a part of
broader structural reforms that help increase the
region's export competitiveness. This includes
strengthening state institutions that protect the rule of
law and private sector competition to unleash productivity
growth and innovation by enabling a level playing field
between firms. Together, these reforms would help unlock
stronger, more equitable, and more sustainable growth,
ensuring faster convergence with EU income levels. A strong
commitment to sound macro-fiscal policy and structural
reforms was always important—rising uncertainties have made
it an imperative. |
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