Estimating quasi-fiscal deficits in a consistency framework : the case of Madagascar

In practice, conventional measures of the fiscal deficit exclude the activities of public financial institutions. As a result, fiscal policies may be applied inappropriately when these institutions - especially the central bank - run large losses (the quasi-fiscal deficit). The macroeconomic effects of the quasi-fiscal deficit are similar to the effects of the deficit from other public entities - and should therefore be included in the public deficit. Conceptual and practical difficulties have so far precluded a definition of quasi-fiscal deficits that is operationally useful and comparable across countries. After studying the methodological and practical problems of treating quasi-fiscal deficits, the authors propose using a flow-of-funds format, which in principle could be standardized across countries. Using Madagascar as an example, they show that the public sector deficit is significantly undervalued if quasi-fiscal deficits are not considered. They contend that such deficits must be taken into account in assessing the success of adjustment problems and development strategies supported by the IMF and the World Bank.Economic Stabilization,Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,National Governance

Rain-Use-Efficiency: What it Tells us about the Conflicting Sahel Greening and Sahelian Paradox

Rain Use Efficiency (RUE), defined as Aboveground Net Primary Production (ANPP) divided by rainfall, is increasingly used to diagnose land degradation. Yet, the outcome of RUE monitoring has been much debated since opposite results were found about land degradation in the Sahel region. The debate is fueled by methodological issues, especially when using satellite remote sensing data to estimate ANPP, and by differences in the ecological interpretation. An alternative method which solves part of these issues relies on the residuals of ANPP regressed against rainfall (“ANPP residuals”). In this paper, we use long-term field observations of herbaceous vegetation mass collected in the Gourma region in Mali together with remote sensing data (GIMMS-3g Normalized Difference Vegetation Index) to estimate ANPP, RUE, and the ANPP residuals, over the period 1984–2010. The residuals as well as RUE do not reveal any trend over time over the Gourma region, implying that vegetation is resilient over that period, when data are aggregated at the Gourma scale. We find no conflict between field-derived and satellite-derived results in terms of trends. The nature (linearity) of the ANPP/rainfall relationship is investigated and is found to have no impact on the RUE and residuals interpretation. However, at odds with a stable RUE, an increased run-off coefficient has been observed in the area over the same period, pointing towards land degradation. The divergence of these two indicators of ecosystem resilience (stable RUE) and land degradation (increasing run-off coefficient) is referred to as the “second Sahelian paradox”. When shallow soils and deep soils are examined separately, high resilience is diagnosed on the deep soil sites. However, some of the shallow soils show signs of degradation, being characterized by decreasing vegetation cover and increasing run-off coefficient. Such results show that contrasted changes may co-exist within a region where a strong overall re-greening pattern is observed, highlighting that both the scale of observations and the scale of the processes have to be considered when performing assessments of vegetation changes and land degradation

Fiscal management in Russia

xxviii, 168 hlm. : il. ; 27 cm

Federal Transfers in Russia: Their Impact on Regional Revenues and Incomes

Since 1991, the Russian system of federal intergovernmental transfers has moved from equalizing to counter-equalizing, both in the case of regional revenue equalization and in the case of regional personal income equalization. This change happened despite increasing revenue and income differentials and despite an introduction of a special equalization fund in 1994. The counter-equalizing effect has been weaker in real terms than in nominal terms indicating that regional price differentials have impicitly been taken into account. The main reasons for increasing counter-equalization seem to be: (i) a relatively small share of transfers in the budget and GDP; (ii) flaws in the equalization formula resulting in the lack of sufficient focus on the poorest regions; and (iii) a non-transparent character of other transfers redistributing often to the most politically powerful regions. The major recommendations for the future are (i) to increase (dramatically) the transparency of expenditure assignment, and (ii) to keep the system simple.

Enterprise restructuring and social benefits

Soviet era firms provided generous social benefits, including health and child care. Despite recent cuts, firm survey data show that benefits have remained a major component of total compensation. With benefits largely firm-specific and firms dominated by insiders, continuing attachment of workers as well as widespread informal sector participation has resulted. This has impeded restructuring, in part by generating significant set-up costs for new private firms. We simulate the effects of a cut in subsidies to benefits provision. We show that while this leads to falls in benefits and employment and an increase in wages, the outcome critically depends on the availability of alternative providers. The key to cushioning these adverse consequences is the stimulation of a market in benefits provision. Given initial conditions, rapid removal of benefits supports will require transitional income support scheme of transitional support and show that it can be financed from the savings from removal of current subsidies to benefits. Copyright The European Bank for Reconstruction and Development, 1997.

Establishing contact between cell-laden hydrogels and metallic implants with a biomimetic adhesive for cell therapy supported implants

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