Prioritizing Expenditures for a Recovery for All: A Rapid Review of Public Expenditures in 126 Developing Countries

Abstract:     
This paper (1) examines the extent to which expenditure consolidation is occurring in 2010-11 among 126 low and middle income countries by compiling and analyzing projected fiscal trends using IMF data; (2) assesses the risks of contracting social spending, and presents common adjustment measures, such as phasing out subsidies, cutting/capping wage bills, and targeting meager social protection schemes; (3) identifies potential financing options for greater pro-poor spending and (4) raises questions for developing countries to consider regarding the timing, composition and scope of expenditure adjustments in the near term. The paper calls for policymakers to evaluate the potential human and development costs of foregone social expenditures and to consider alternative policy measures to ensure a “Recovery for All.”

Number of Pages in PDF File: 56

Keywords: Fiscal Consolidation, Public Expenditures, Social Spending, Crisis Recovery, Poverty, Wage Bill, Food Subsidies, Social Protection

JEL Classification: H5, H12, O23, H5, I3, J3

working papers series