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January 23, 2008

Building Fiscal Infrastructure in Post-Conflict Countries

New USAID Study Released

Posted by Justin Tyson

A recent study produced for USAID, Building Fiscal Infrastructure in Post-Conflict Countries, presents seven case studies of building, or rebuilding, fiscal infrastructure in countries that have emerged from periods of conflict.  The countries included are from different regions around the world, including: Afghanistan, Angola, Bosnia and Herzegovina, El Salvador, Guatemala, Kosovo, and Liberia.

The study focuses primarily on USAID experience and projects in rehabilitating fiscal infrastructure, which is understood to refer to public revenue and expenditure management systems, fiscal policy analysis and policy making support, including statistics. It provides a useful compilation of reform initiatives in various countries. Despite the diversity of countries covered, the case studies reveal considerable commonalities and the paper seeks to draw lessons and provide guidance for future interventions.

Key lessons highlighted include

  • the importance of capacity building within key institutions,
  • the need to gain control over the receipts process,
  • the criticality of building analytical skills alongside administrative skills, and
  • establishing control over expenditure policies.

While the nature of peace and the importance of politics are mentioned, it would be useful if the study had provided more detail on the need to consider fiscal reforms within the context of any emerging political and constitutional debates. Post-conflict countries are often in a state of political and constitutional flux. Early fiscal infrastructure reforms may favor greater centralization of control to increase efficiency, whereas political forces may pull in the opposite direction.

Readers interested in this topic might also visit New York University's Center on International Cooperation website that has a section dedicated to Public Finance and Economic Recovery in post-conflict environments, including for example a paper on revenue generation.

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