Fiscal Policy for Growth and Development
The global economic crisis that broke out in 2008 has reawakened interest in fiscal policy. In the early stages of the crisis, there was a widespread turn to countercyclical fiscal stimulus. Furthermore, the recent euro area crisis has underlined t...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/10/16795676/fiscal-policy-growth-development http://hdl.handle.net/10986/17076 |
| Summary: | The global economic crisis that broke
out in 2008 has reawakened interest in fiscal policy. In the
early stages of the crisis, there was a widespread turn to
countercyclical fiscal stimulus. Furthermore, the recent
euro area crisis has underlined the importance of long-term
fiscal sustainability for macroeconomic stability. More
subtly, the global crisis has also refocused interest in
fiscal policy as an instrument for longer-term growth and
development. In the potential 'new normal' of
continued sluggishness in the advanced world, developing
countries have strong incentives to seek out new domestic
engines for efficiency and productivity growth, as well as
for greater equity in development. The potential of fiscal
policy to promote these ends is therefore of great interest
to developing country policy makers. This note focuses on
that potential and provides an overview of how fiscal
positions in developing countries have evolved in the wake
of the crisis, as well as some emerging policy lessons. It
then sketches a conceptual framework for thinking about the
connections between fiscal policy and longer-term growth and
development. Finally, this note highlights some findings
about the connections between fiscal policy and development. |
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