And the Winners are......!!! Best Read PFM Posts of 2009

Posted by Holger van Eden, with support from Sasha Pitrof and Dimitar Vlahov 

The PFM Blog is happy to report that 2009 was a good year for the Blog. Readership was up by almost 17.5 percent. With some twelve thousand hits per month, the blog seems to be fulfilling a useful role in informing budget and treasury officials, PFM practitioners, academics and students from around the world, on the ideas, trends, and innovations in the wondrous world of public financial management. It also provides staff of the Fiscal Affairs Department (FAD) of the IMF, and sister institutions, a convenient way to present their technical assistance activities and research efforts, including most recently the new Technical Notes and Manual series.

The best read blog post this year was sent in by Richard Allen who sadly is retiring from the Fund after a long and fruitful career spanning the UK Treasury, OECD-SIGMA, and the World Bank (it seems the Bank has already reigned him back in as a consultant). He will be sorely missed in FAD. The post is vintage Richard Allen: PFM reforms are much more difficult than countries realize, and are embarked on without due regard for “basic” PFM systems being in place. Reforms often fail. They are cumbersome, multidecade efforts. The support from multilateral institutions is usually misguided, overly ambitious, and overburdening of the capacity for change, etc. Somewhat depressing, but mostly true, alas. If you haven’t read it yet, enjoy!

Efficiency Dividends: What is the Magic Number?

Posted by Richard Hughes 

What a difference a year makes. Last autumn, the fiscal policy debate in advanced countries was dominated by the need to shore up ailing financial systems, stimulate hesitant consumers, and bolster faltering economies. Twelve months later, the financial headlines are filled with talk of exit strategies and fiscal sustainability, and policy discussions are increasingly focused on the questions of when, where, and how to go about a fiscal consolidation.

Previous postings have discussed the lessons from successful consolidation episodes in the past, one of which was to favor cutting expenditure over raising taxes as a route to sustainability. However, concerns about protecting “priority” services during such expenditure-based consolidations have prompted a number of fiscally-challenged finance ministries to resuscitate the idea of an “efficiency dividend.”

Fiscal Rules as an Anchor for Sustainable Public Finances

Posted by Manmohan Kumar and Andrea Schaechter 

The sharp increase in fiscal deficits and public debt in most advanced and several developing economies has raised concerns about the sustainability of public finances and highlighted the need for a significant adjustment over the medium term. A recent IMF staff paper on “Fiscal Rules—Anchoring Expectations for Sustainable Public Finances” (attached below) assesses the usefulness of fiscal rules in supporting fiscal consolidation, key design and implementation features, response of rules to the current crisis, and the frameworks that can be implemented as countries emerge from the crisis.[1] The analysis draws on a new data base spanning the whole Fund membership.