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UNU-WIDER Fiscal Policy for Poverty Reduction, Reconstruction, and Growth

Support functions

A teenager wears torn rubber boots in a muddy local market in Bac Ha, Viet Nam. As of 2005 figures, half the world population—more than 3 billion people–is estimated to live on less than USD 2.50 a day. Bac Ha, Viet Nam. UN Photo/Kibae Park.

Table of contents

Fiscal Policy for Poverty Reduction, Reconstruction, and Growth

Growth, poverty reduction, and social peace are all undermined when public expenditure management and taxation are weak and when the fiscal deficit and public debt are not managed successfully. And large-scale aid and debt relief cannot work without a good fiscal system. The macroeconomic frameworks of many poor countries are improving, but fiscal policy's full potential will not be realized until good and accountable expenditure and taxation systems are built. Good fiscal policy can raise economic growth through well-chosen public investments provided that the spending is large enough. Growth itself increases the tax base generating the potential for higher public spending on poverty reduction. Fiscal reform can be a tool for peace when an unfair distribution of spending and taxation generates grievances that turn violent. Overall, fiscal policy reveals more about the political priorities underpinning a country's development strategy than any other area of policymaking.
Publisher:
UNU-WIDER
Series:
UNU Policy Brief
Volume:
05/2006
Title:
Fiscal Policy for Poverty Reduction, Reconstruction, and Growth
Authors:
Tony Addison, Alan Roe, and Matthew Smith
Publication date:
June 2006
ISSN Web:
1814-8026
ISBN Printed:
928083018X
ISBN Web:
9280830198
ISBN 13 Print:
9789280830187
ISBN 13 Web:
9789280830194
Copyright holder:
© UNU
Copyright year:
2006
Keywords:
governance, taxation, aid, debt relief, poverty reduction, peace, fiscal policy, policy, growth
JEL:
E62, H30
Project:
New Fiscal Policies for Growth and Poverty Reduction
Sponsor:
The governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency-Sida) and the United Kingdom (Department for International Development).
Format:
online and printed copies
 
Licensed under the Creative Commons Deed "Attribution-NonCommercial-NoDerivs 2.5"

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