Fiscal Rules, Public Investment, and Growth

Solvency is an intertemporal concept, relating to the present value of revenues and expenditures, and encompassing both assets and liabilities. But the standard practice among policy makers, financial market participants and international financial...

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Main Author: Servén, Luis
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
TAX
Online Access:http://documents.worldbank.org/curated/en/2007/11/8665414/fiscal-rules-public-investment-growth
http://hdl.handle.net/10986/7543
id okr-10986-7543
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCOUNTING
ACCRUAL ACCOUNTING
ADVERSE CONSEQUENCES
AGGREGATE DEMAND
ASSET ACCUMULATION
BALANCE SHEET
BANK POLICY
BIASES
BORROWING REQUIREMENT
BRIBES
BUDGET BALANCE
BUDGET CONSTRAINT
BUDGET DEFICITS
BUDGETARY ACCOUNTING
BUDGETARY INSTITUTIONS
CAPACITY ENHANCEMENTS
CAPITAL ACCUMULATION
CAPITAL ASSETS
CAPITAL BUDGET
CAPITAL EXPENDITURE
CAPITAL FORMATION
CAPITAL SPENDING
CAPITAL STOCK
CAPITAL STOCKS
CASH BALANCE
CASH DEFICIT
CASH FLOW
CASH FLOWS
CHECKS
CONTINGENT LIABILITIES
CORPORATE FINANCE
COST OF CAPITAL
COST-BENEFIT ANALYSIS
CURRENT ACCOUNT
DEBT
DEBT ACCUMULATION
DEBT DEFAULT
DEBT DYNAMICS
DEBT FINANCE
DEBT ISSUANCE
DEBT ISSUE
DEBT RATIO
DEFAULT PREMIUM
DEFICITS
DEPRECIATION
DERIVATIVE
DEVELOPING COUNTRIES
DISCOUNT RATE
DISCOUNT RATES
ECONOMIC DEVELOPMENT
ECONOMIC GROWTH
ECONOMIC POLICY
EFFECTS OF CORRUPTION
EFFICIENCY GAINS
ENDOWMENTS
EQUALITY
EXPENDITURE
EXPENDITURES
FACE VALUE
FINANCIAL MARKET
FINANCIAL MARKET PARTICIPANTS
FINANCIAL MARKETS
FINANCIAL POLICY
FINANCIAL RATE OF RETURN
FINANCING NEEDS
FISCAL ACCOUNTS
FISCAL ADJUSTMENT
FISCAL AGGREGATES
FISCAL AUSTERITY
FISCAL AUTHORITIES
FISCAL CONSEQUENCES
FISCAL DEFICIT
FISCAL DISCIPLINE
FISCAL MANAGEMENT
FISCAL PERFORMANCE
FISCAL POLICY
FISCAL POLICY FRAMEWORK
FISCAL PROJECTIONS
FISCAL RETRENCHMENT
FISCAL REVENUE
FISCAL RULES
FISCAL STABILITY
FISCAL STRATEGIES
FISCAL SUSTAINABILITY
FISCAL TARGETS
FISCAL TRANSPARENCY
FUTURE CASH FLOWS
FUTURE GROWTH
FUTURE INCOME
GOLDEN RULE
GOVERNMENT BORROWING
GOVERNMENT BUDGET
GOVERNMENT BUDGETS
GOVERNMENT DEFICIT
GOVERNMENT EXPENDITURE
GOVERNMENT EXPENDITURES
GOVERNMENT GUARANTEES
GOVERNMENT INDEBTEDNESS
GOVERNMENT REVENUE
GOVERNMENT SPENDING
GROSS DEBT
GROWTH MODEL
GROWTH RATE
HOLDING
HUMAN CAPITAL
INCOME DISTRIBUTION
INCOME GROWTH
INDEBTEDNESS
INEQUALITY
INFLATION
INFRASTRUCTURE DEVELOPMENT
INFRASTRUCTURE INVESTMENT
INFRASTRUCTURE PROJECTS
INITIAL DEBT
INITIAL INVESTMENT
INTEREST PAYMENTS
INTEREST RATES
INTERNATIONAL BANK
INTERNATIONAL DEVELOPMENT
INTERNATIONAL FINANCIAL INSTITUTIONS
INVESTMENT EXPENDITURE
INVESTMENT FLOWS
INVESTMENT OPPORTUNITIES
INVESTMENT PROJECTS
INVESTMENT RATE
INVESTMENT RISK
INVESTMENT SPENDING
LIQUIDITY
LONG-RUN DEBT
MACROECONOMIC EFFECTS
MACROECONOMIC IMPACT
MACROECONOMIC MODEL
MACROECONOMIC STABILITY
MARGINAL COST
MARKET PRICE
MEMBER COUNTRIES
MONETARY FUND
NATIONAL ACCOUNTS
NEGATIVE VALUES
NET INVESTMENT
NET LENDING
OPERATING COSTS
OPPORTUNISTIC BEHAVIOR
OPTIMAL CHOICE
OUTPUT RATIO
OUTSTANDING DEBT
OUTSTANDING DEBT STOCK
PENSIONS
PERFORMANCE INDICATORS
PHYSICAL ASSET
POLITICAL ECONOMY
PRESENT VALUE
PRIVATE CAPITAL
PRIVATE INVESTMENT
PRIVATE INVESTORS
PRIVATE SECTOR
PRIVATIZATION
PROGRAMS
PUBLIC ASSETS
PUBLIC CAPITAL
PUBLIC CONSUMPTION
PUBLIC DEBT
PUBLIC DEBT STOCK
PUBLIC DEFICIT
PUBLIC DEFICITS
PUBLIC ECONOMICS
PUBLIC EXPENDITURE
PUBLIC EXPENDITURES
PUBLIC FINANCE
PUBLIC FINANCES
PUBLIC GOODS
PUBLIC INFRASTRUCTURE
PUBLIC INVESTMENT
PUBLIC INVESTMENT PROGRAM
PUBLIC PROCUREMENT
PUBLIC REVENUE
PUBLIC REVENUES
PUBLIC SECTOR
PUBLIC SECTOR BORROWING
PUBLIC SECTOR NET WORTH
PUBLIC SERVICE
PUBLIC SERVICES
PUBLIC SPENDING
RATE OF RETURN
RATES OF RETURN
REAL GROWTH
REAL GROWTH RATE
REAL INTEREST
REAL INTEREST RATE
REAL INTEREST RATES
RESEARCH ASSISTANCE
RETURN
RETURNS
SANITATION
SELF-FINANCING
SERVICE PROVISION
SOLVENCY
STABILIZATION POLICIES
STOCKS
TAX
TAX BASE
TAX BASES
TAX COLLECTION
TAX POLICY
TAX RATE
TAX RATES
TAX REVENUE
TAX REVENUES
TAX SYSTEM
TAXPAYERS
TELECOMMUNICATIONS
TRANSACTION
TRANSPARENCY
TREASURY
TYPES OF EXPENDITURES
UNCERTAINTY
UNION
USER FEE
USER FEES
WAGES
WELFARE LOSS
spellingShingle ACCOUNTING
ACCRUAL ACCOUNTING
ADVERSE CONSEQUENCES
AGGREGATE DEMAND
ASSET ACCUMULATION
BALANCE SHEET
BANK POLICY
BIASES
BORROWING REQUIREMENT
BRIBES
BUDGET BALANCE
BUDGET CONSTRAINT
BUDGET DEFICITS
BUDGETARY ACCOUNTING
BUDGETARY INSTITUTIONS
CAPACITY ENHANCEMENTS
CAPITAL ACCUMULATION
CAPITAL ASSETS
CAPITAL BUDGET
CAPITAL EXPENDITURE
CAPITAL FORMATION
CAPITAL SPENDING
CAPITAL STOCK
CAPITAL STOCKS
CASH BALANCE
CASH DEFICIT
CASH FLOW
CASH FLOWS
CHECKS
CONTINGENT LIABILITIES
CORPORATE FINANCE
COST OF CAPITAL
COST-BENEFIT ANALYSIS
CURRENT ACCOUNT
DEBT
DEBT ACCUMULATION
DEBT DEFAULT
DEBT DYNAMICS
DEBT FINANCE
DEBT ISSUANCE
DEBT ISSUE
DEBT RATIO
DEFAULT PREMIUM
DEFICITS
DEPRECIATION
DERIVATIVE
DEVELOPING COUNTRIES
DISCOUNT RATE
DISCOUNT RATES
ECONOMIC DEVELOPMENT
ECONOMIC GROWTH
ECONOMIC POLICY
EFFECTS OF CORRUPTION
EFFICIENCY GAINS
ENDOWMENTS
EQUALITY
EXPENDITURE
EXPENDITURES
FACE VALUE
FINANCIAL MARKET
FINANCIAL MARKET PARTICIPANTS
FINANCIAL MARKETS
FINANCIAL POLICY
FINANCIAL RATE OF RETURN
FINANCING NEEDS
FISCAL ACCOUNTS
FISCAL ADJUSTMENT
FISCAL AGGREGATES
FISCAL AUSTERITY
FISCAL AUTHORITIES
FISCAL CONSEQUENCES
FISCAL DEFICIT
FISCAL DISCIPLINE
FISCAL MANAGEMENT
FISCAL PERFORMANCE
FISCAL POLICY
FISCAL POLICY FRAMEWORK
FISCAL PROJECTIONS
FISCAL RETRENCHMENT
FISCAL REVENUE
FISCAL RULES
FISCAL STABILITY
FISCAL STRATEGIES
FISCAL SUSTAINABILITY
FISCAL TARGETS
FISCAL TRANSPARENCY
FUTURE CASH FLOWS
FUTURE GROWTH
FUTURE INCOME
GOLDEN RULE
GOVERNMENT BORROWING
GOVERNMENT BUDGET
GOVERNMENT BUDGETS
GOVERNMENT DEFICIT
GOVERNMENT EXPENDITURE
GOVERNMENT EXPENDITURES
GOVERNMENT GUARANTEES
GOVERNMENT INDEBTEDNESS
GOVERNMENT REVENUE
GOVERNMENT SPENDING
GROSS DEBT
GROWTH MODEL
GROWTH RATE
HOLDING
HUMAN CAPITAL
INCOME DISTRIBUTION
INCOME GROWTH
INDEBTEDNESS
INEQUALITY
INFLATION
INFRASTRUCTURE DEVELOPMENT
INFRASTRUCTURE INVESTMENT
INFRASTRUCTURE PROJECTS
INITIAL DEBT
INITIAL INVESTMENT
INTEREST PAYMENTS
INTEREST RATES
INTERNATIONAL BANK
INTERNATIONAL DEVELOPMENT
INTERNATIONAL FINANCIAL INSTITUTIONS
INVESTMENT EXPENDITURE
INVESTMENT FLOWS
INVESTMENT OPPORTUNITIES
INVESTMENT PROJECTS
INVESTMENT RATE
INVESTMENT RISK
INVESTMENT SPENDING
LIQUIDITY
LONG-RUN DEBT
MACROECONOMIC EFFECTS
MACROECONOMIC IMPACT
MACROECONOMIC MODEL
MACROECONOMIC STABILITY
MARGINAL COST
MARKET PRICE
MEMBER COUNTRIES
MONETARY FUND
NATIONAL ACCOUNTS
NEGATIVE VALUES
NET INVESTMENT
NET LENDING
OPERATING COSTS
OPPORTUNISTIC BEHAVIOR
OPTIMAL CHOICE
OUTPUT RATIO
OUTSTANDING DEBT
OUTSTANDING DEBT STOCK
PENSIONS
PERFORMANCE INDICATORS
PHYSICAL ASSET
POLITICAL ECONOMY
PRESENT VALUE
PRIVATE CAPITAL
PRIVATE INVESTMENT
PRIVATE INVESTORS
PRIVATE SECTOR
PRIVATIZATION
PROGRAMS
PUBLIC ASSETS
PUBLIC CAPITAL
PUBLIC CONSUMPTION
PUBLIC DEBT
PUBLIC DEBT STOCK
PUBLIC DEFICIT
PUBLIC DEFICITS
PUBLIC ECONOMICS
PUBLIC EXPENDITURE
PUBLIC EXPENDITURES
PUBLIC FINANCE
PUBLIC FINANCES
PUBLIC GOODS
PUBLIC INFRASTRUCTURE
PUBLIC INVESTMENT
PUBLIC INVESTMENT PROGRAM
PUBLIC PROCUREMENT
PUBLIC REVENUE
PUBLIC REVENUES
PUBLIC SECTOR
PUBLIC SECTOR BORROWING
PUBLIC SECTOR NET WORTH
PUBLIC SERVICE
PUBLIC SERVICES
PUBLIC SPENDING
RATE OF RETURN
RATES OF RETURN
REAL GROWTH
REAL GROWTH RATE
REAL INTEREST
REAL INTEREST RATE
REAL INTEREST RATES
RESEARCH ASSISTANCE
RETURN
RETURNS
SANITATION
SELF-FINANCING
SERVICE PROVISION
SOLVENCY
STABILIZATION POLICIES
STOCKS
TAX
TAX BASE
TAX BASES
TAX COLLECTION
TAX POLICY
TAX RATE
TAX RATES
TAX REVENUE
TAX REVENUES
TAX SYSTEM
TAXPAYERS
TELECOMMUNICATIONS
TRANSACTION
TRANSPARENCY
TREASURY
TYPES OF EXPENDITURES
UNCERTAINTY
UNION
USER FEE
USER FEES
WAGES
WELFARE LOSS
Servén, Luis
Fiscal Rules, Public Investment, and Growth
relation Policy Research Working Paper; No. 4382
description Solvency is an intertemporal concept, relating to the present value of revenues and expenditures, and encompassing both assets and liabilities. But the standard practice among policy makers, financial market participants and international financial institutions is to assess the strength of the fiscal accounts solely on the basis of the cash deficit. Short-term cash flows matter, but a preponderant focus on them can encourage governments to invest too little, especially during episodes of fiscal tightening. This has potentially adverse consequences for growth and, paradoxically, even for fiscal solvency itself. The paper offers an overview of the links between fiscal targets, public investment, and public sector solvency. After reviewing the international experience with public investment under fiscal adjustment, the paper lays out an analytical framework to illustrate the consequences of using the public deficit as a guide to solvency. The paper then discusses some alternatives to conventional cash deficit rules and their implications for investment and fiscal solvency.
format Publications & Research :: Policy Research Working Paper
author Servén, Luis
author_facet Servén, Luis
author_sort Servén, Luis
title Fiscal Rules, Public Investment, and Growth
title_short Fiscal Rules, Public Investment, and Growth
title_full Fiscal Rules, Public Investment, and Growth
title_fullStr Fiscal Rules, Public Investment, and Growth
title_full_unstemmed Fiscal Rules, Public Investment, and Growth
title_sort fiscal rules, public investment, and growth
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2007/11/8665414/fiscal-rules-public-investment-growth
http://hdl.handle.net/10986/7543
_version_ 1764402476965953536
spelling okr-10986-75432021-04-23T14:02:34Z Fiscal Rules, Public Investment, and Growth Servén, Luis ACCOUNTING ACCRUAL ACCOUNTING ADVERSE CONSEQUENCES AGGREGATE DEMAND ASSET ACCUMULATION BALANCE SHEET BANK POLICY BIASES BORROWING REQUIREMENT BRIBES BUDGET BALANCE BUDGET CONSTRAINT BUDGET DEFICITS BUDGETARY ACCOUNTING BUDGETARY INSTITUTIONS CAPACITY ENHANCEMENTS CAPITAL ACCUMULATION CAPITAL ASSETS CAPITAL BUDGET CAPITAL EXPENDITURE CAPITAL FORMATION CAPITAL SPENDING CAPITAL STOCK CAPITAL STOCKS CASH BALANCE CASH DEFICIT CASH FLOW CASH FLOWS CHECKS CONTINGENT LIABILITIES CORPORATE FINANCE COST OF CAPITAL COST-BENEFIT ANALYSIS CURRENT ACCOUNT DEBT DEBT ACCUMULATION DEBT DEFAULT DEBT DYNAMICS DEBT FINANCE DEBT ISSUANCE DEBT ISSUE DEBT RATIO DEFAULT PREMIUM DEFICITS DEPRECIATION DERIVATIVE DEVELOPING COUNTRIES DISCOUNT RATE DISCOUNT RATES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EFFECTS OF CORRUPTION EFFICIENCY GAINS ENDOWMENTS EQUALITY EXPENDITURE EXPENDITURES FACE VALUE FINANCIAL MARKET FINANCIAL MARKET PARTICIPANTS FINANCIAL MARKETS FINANCIAL POLICY FINANCIAL RATE OF RETURN FINANCING NEEDS FISCAL ACCOUNTS FISCAL ADJUSTMENT FISCAL AGGREGATES FISCAL AUSTERITY FISCAL AUTHORITIES FISCAL CONSEQUENCES FISCAL DEFICIT FISCAL DISCIPLINE FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL POLICY FISCAL POLICY FRAMEWORK FISCAL PROJECTIONS FISCAL RETRENCHMENT FISCAL REVENUE FISCAL RULES FISCAL STABILITY FISCAL STRATEGIES FISCAL SUSTAINABILITY FISCAL TARGETS FISCAL TRANSPARENCY FUTURE CASH FLOWS FUTURE GROWTH FUTURE INCOME GOLDEN RULE GOVERNMENT BORROWING GOVERNMENT BUDGET GOVERNMENT BUDGETS GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT GUARANTEES GOVERNMENT INDEBTEDNESS GOVERNMENT REVENUE GOVERNMENT SPENDING GROSS DEBT GROWTH MODEL GROWTH RATE HOLDING HUMAN CAPITAL INCOME DISTRIBUTION INCOME GROWTH INDEBTEDNESS INEQUALITY INFLATION INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INITIAL DEBT INITIAL INVESTMENT INTEREST PAYMENTS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCIAL INSTITUTIONS INVESTMENT EXPENDITURE INVESTMENT FLOWS INVESTMENT OPPORTUNITIES INVESTMENT PROJECTS INVESTMENT RATE INVESTMENT RISK INVESTMENT SPENDING LIQUIDITY LONG-RUN DEBT MACROECONOMIC EFFECTS MACROECONOMIC IMPACT MACROECONOMIC MODEL MACROECONOMIC STABILITY MARGINAL COST MARKET PRICE MEMBER COUNTRIES MONETARY FUND NATIONAL ACCOUNTS NEGATIVE VALUES NET INVESTMENT NET LENDING OPERATING COSTS OPPORTUNISTIC BEHAVIOR OPTIMAL CHOICE OUTPUT RATIO OUTSTANDING DEBT OUTSTANDING DEBT STOCK PENSIONS PERFORMANCE INDICATORS PHYSICAL ASSET POLITICAL ECONOMY PRESENT VALUE PRIVATE CAPITAL PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR PRIVATIZATION PROGRAMS PUBLIC ASSETS PUBLIC CAPITAL PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC DEBT STOCK PUBLIC DEFICIT PUBLIC DEFICITS PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC FINANCES PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT PROGRAM PUBLIC PROCUREMENT PUBLIC REVENUE PUBLIC REVENUES PUBLIC SECTOR PUBLIC SECTOR BORROWING PUBLIC SECTOR NET WORTH PUBLIC SERVICE PUBLIC SERVICES PUBLIC SPENDING RATE OF RETURN RATES OF RETURN REAL GROWTH REAL GROWTH RATE REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES RESEARCH ASSISTANCE RETURN RETURNS SANITATION SELF-FINANCING SERVICE PROVISION SOLVENCY STABILIZATION POLICIES STOCKS TAX TAX BASE TAX BASES TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAX SYSTEM TAXPAYERS TELECOMMUNICATIONS TRANSACTION TRANSPARENCY TREASURY TYPES OF EXPENDITURES UNCERTAINTY UNION USER FEE USER FEES WAGES WELFARE LOSS Solvency is an intertemporal concept, relating to the present value of revenues and expenditures, and encompassing both assets and liabilities. But the standard practice among policy makers, financial market participants and international financial institutions is to assess the strength of the fiscal accounts solely on the basis of the cash deficit. Short-term cash flows matter, but a preponderant focus on them can encourage governments to invest too little, especially during episodes of fiscal tightening. This has potentially adverse consequences for growth and, paradoxically, even for fiscal solvency itself. The paper offers an overview of the links between fiscal targets, public investment, and public sector solvency. After reviewing the international experience with public investment under fiscal adjustment, the paper lays out an analytical framework to illustrate the consequences of using the public deficit as a guide to solvency. The paper then discusses some alternatives to conventional cash deficit rules and their implications for investment and fiscal solvency. 2012-06-08T17:15:46Z 2012-06-08T17:15:46Z 2007-11 http://documents.worldbank.org/curated/en/2007/11/8665414/fiscal-rules-public-investment-growth http://hdl.handle.net/10986/7543 English Policy Research Working Paper; No. 4382 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research