A Rule-Based Medium-Term Fiscal Policy Framework for Tanzania

WPIEA2009244 Image
Price:  $18.00

Author/Editor: Daehaeng Kim, Mika Saito
Release Date: © November, 2009
ISBN : 978-1-45187-391-7
Stock #: WPIEA2009244
Stock Status: On back-order

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A zero net domestic financing (NDF) target has served Tanzania well in recent years, contributing to prudent expenditure policy, improved fiscal sustainability, and macroeconomic stability. Moving to a more flexible fiscal policy, however, may serve Tanzania better. The "diamond rule" proposed in this paper incorporates a permanent hard ceiling on debt and annual benchmark limits on NDF, expenditure growth, and nonconcessional external financing. This rule would provide flexibility for countercyclical policy and help define the fiscal space for infrastructure spending that is consistent with longrun fiscal sustainability. An illustrative simulation shows that Tanzania has considerable fiscal space for development spending.


Budgeting , Economic policy , Fiscal policy

More publications in this series: Working Papers

More publications by: Daehaeng Kim ; Mika Saito