The three-point VAT increase is part of a package in which unemployment payroll taxes will be reduced. Risks to the recovery are balanced but the range of forecasts for 2007 is unusually wide. The priority for Germany is to transmit its external strength to the domestic economy, thus further...

It is shown that the inefficiencies created by the “soft” budget constraint, enjoyed by enterprises in Eastern Europe and elsewhere, will continue so long as governments are unable credibly to threaten not to bail out loss-makers. Commitment to a “hard” budget constraint can best be...

This paper considers the implications of the prospective aging of the U.S. population for the social security system and concludes that the large and growing cashflow surpluses of the social security trust funds should be saved to help insulate living stands against this change. A number of...

The paper surveys the major economic, financial, and administrative issues that confront social security systems in Latin America. The larger systems have contributed substantially to public sector financial disequilibria. Expenditures of the younger systems with more limited coverage could...

Concerns about restructuring old-age income provisions and reforming public pension schemes are an OECD-wide phenomenon. This paper highlights first the background of the reform debate. Despite the divergences in the structure of public pension schemes, the main pressures for reform are...

Experience shows that there is often ample room for more effective and efficient use of investment tax incentives in low-income countries. Tax incentives generally rank low in investment climate surveys in low-income countries, and there are many examples in which they are reported to be...

Several of the transition economies are devolving fiscal authority to subnational governments at a time when it is also important to consolidate fiscal policy. This can be problematic because, without appropriate care, the central government''s ability to determine the level and structure of...

This paper examines the extent to which conclusions of cross-country studies of private savings are robust to allowing for the possible heterogeneity of savings behavior across countries and the inclusion of dynamics. It shows that neglecting heterogeneity and dynamics can lead to misleading...

As a companion piece to the Board paper on Structural Reforms and Macroeconomic Performance: Initial Considerations for the Fund, this paper presents a selection of case studies on the structural reform experiences of member countries. These papers update the Board on work since the Triennial...

This report provides a first broad assessment of the impact of the surge in food and fuel prices on the balance of payments, budgets, prices, and poverty of a large sample of countries. It reviews countries' macroeconomic policy responses to date and also discusses Fund advice for managing the...