Walking Up the Down Escalator : Public Investment and Fiscal Stability
Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit....
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/03/7435956/walking-up-down-escalator-public-investment-fiscal-stability http://hdl.handle.net/10986/7191 |
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okr-10986-7191 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ACCOUNTING STANDARDS ACCRUAL ACCOUNTING ADJUSTMENT PROGRAMS AGGREGATE BUDGET AGGREGATE DEMAND ASSET VALUE BRIBES BUDGET ALLOCATION BUDGET DEPARTMENT BUDGET SURPLUS BUDGETARY MANAGEMENT BUDGETARY RESOURCES BURDEN OF TAXATION CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL EXPENDITURES CAPITAL NEEDS CAPITAL STOCK CASH DEFICIT CASH FLOW CASH FLOWS COMPETITIVE MARKETS COMPOSITION OF EXPENDITURES CORPORATE GOVERNANCE COST OF CAPITAL COST RECOVERY DEBT DEBT CRISIS DEBT DYNAMICS DEFICIT FINANCE DEFICIT FINANCING DEFICITS EDUCATION EXPENDITURES EDUCATION SERVICES ENTITLEMENTS EXPECTED RETURNS EXPENDITURE CUTS EXPENDITURE ITEM EXPENDITURES FINANCIAL ASSETS FINANCIAL MARKET FINANCIAL REPORTING FINANCIAL REPORTS FISCAL ADJUSTMENT FISCAL AGGREGATES FISCAL AUSTERITY FISCAL AUTHORITIES FISCAL DEFICIT FISCAL DISCIPLINE FISCAL INSTITUTIONS FISCAL PERFORMANCE FISCAL POLICY FISCAL POSITION FISCAL PROJECTIONS FISCAL RETRENCHMENT FISCAL RULES FISCAL STABILITY FISCAL STANCE FISCAL STIMULUS FISCAL STRATEGIES FISCAL STRATEGY FISCAL TARGETS FUNGIBILITY GOVERNMENT SOLVENCY GROSS DEBT GROWTH OF PUBLIC SPENDING GROWTH POTENTIAL GROWTH RATES HIGHER INTEREST HIGHER INTEREST RATES INDEPENDENT AUDITOR INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INFRASTRUCTURE SERVICES INVESTMENT DECISIONS INVESTMENT FLOWS INVESTMENT PROJECTS INVESTMENT RISK LATIN AMERICAN LEVEL OF INDEBTEDNESS LIQUIDITY MACROECONOMIC MODEL MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COST MARGINAL EXCESS MARGINAL EXCESS BURDEN MARKET VALUE NET LENDING NET WORTH PERFORMANCE INDICATORS PERFORMANCE TARGETS POLITICIANS POVERTY REDUCTION PRESENT VALUE PRIMARY DEFICIT PRIVATE FIRMS PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PROFITABILITY PROGRAMS PROVISION OF INFRASTRUCTURE PUBLIC PUBLIC CAPITAL PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC ENTERPRISES PUBLIC ENTITIES PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCES PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT PROGRAM PUBLIC INVESTMENT SPENDING PUBLIC INVESTMENTS PUBLIC PROCUREMENT PUBLIC REVENUES PUBLIC SECTOR PUBLIC SECTOR BORROWING PUBLIC SECTOR BORROWING REQUIREMENT PUBLIC SECTOR NET WORTH PUBLIC SECTOR PROJECTS PUBLIC SECTOR RETRENCHMENT PUBLIC SECTOR SOLVENCY PUBLIC SERVICES PUBLIC SPENDING REAL INTEREST RATE RECURRENT EXPENDITURES REVENUE COLLECTION REVENUE INCREASES RISK PREMIUM ROADS SOCIAL RETURN SOCIAL RETURNS SPENDING CUTS SUB-SAHARAN AFRICA TAX TAX BASES TAX COLLECTION TAX RATE TAX REVENUE TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL SPENDING TRANSPARENCY UNCERTAINTY UTILITIES |
| spellingShingle |
ACCOUNTING ACCOUNTING STANDARDS ACCRUAL ACCOUNTING ADJUSTMENT PROGRAMS AGGREGATE BUDGET AGGREGATE DEMAND ASSET VALUE BRIBES BUDGET ALLOCATION BUDGET DEPARTMENT BUDGET SURPLUS BUDGETARY MANAGEMENT BUDGETARY RESOURCES BURDEN OF TAXATION CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL EXPENDITURES CAPITAL NEEDS CAPITAL STOCK CASH DEFICIT CASH FLOW CASH FLOWS COMPETITIVE MARKETS COMPOSITION OF EXPENDITURES CORPORATE GOVERNANCE COST OF CAPITAL COST RECOVERY DEBT DEBT CRISIS DEBT DYNAMICS DEFICIT FINANCE DEFICIT FINANCING DEFICITS EDUCATION EXPENDITURES EDUCATION SERVICES ENTITLEMENTS EXPECTED RETURNS EXPENDITURE CUTS EXPENDITURE ITEM EXPENDITURES FINANCIAL ASSETS FINANCIAL MARKET FINANCIAL REPORTING FINANCIAL REPORTS FISCAL ADJUSTMENT FISCAL AGGREGATES FISCAL AUSTERITY FISCAL AUTHORITIES FISCAL DEFICIT FISCAL DISCIPLINE FISCAL INSTITUTIONS FISCAL PERFORMANCE FISCAL POLICY FISCAL POSITION FISCAL PROJECTIONS FISCAL RETRENCHMENT FISCAL RULES FISCAL STABILITY FISCAL STANCE FISCAL STIMULUS FISCAL STRATEGIES FISCAL STRATEGY FISCAL TARGETS FUNGIBILITY GOVERNMENT SOLVENCY GROSS DEBT GROWTH OF PUBLIC SPENDING GROWTH POTENTIAL GROWTH RATES HIGHER INTEREST HIGHER INTEREST RATES INDEPENDENT AUDITOR INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INFRASTRUCTURE SERVICES INVESTMENT DECISIONS INVESTMENT FLOWS INVESTMENT PROJECTS INVESTMENT RISK LATIN AMERICAN LEVEL OF INDEBTEDNESS LIQUIDITY MACROECONOMIC MODEL MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COST MARGINAL EXCESS MARGINAL EXCESS BURDEN MARKET VALUE NET LENDING NET WORTH PERFORMANCE INDICATORS PERFORMANCE TARGETS POLITICIANS POVERTY REDUCTION PRESENT VALUE PRIMARY DEFICIT PRIVATE FIRMS PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PROFITABILITY PROGRAMS PROVISION OF INFRASTRUCTURE PUBLIC PUBLIC CAPITAL PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC ENTERPRISES PUBLIC ENTITIES PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCES PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT PROGRAM PUBLIC INVESTMENT SPENDING PUBLIC INVESTMENTS PUBLIC PROCUREMENT PUBLIC REVENUES PUBLIC SECTOR PUBLIC SECTOR BORROWING PUBLIC SECTOR BORROWING REQUIREMENT PUBLIC SECTOR NET WORTH PUBLIC SECTOR PROJECTS PUBLIC SECTOR RETRENCHMENT PUBLIC SECTOR SOLVENCY PUBLIC SERVICES PUBLIC SPENDING REAL INTEREST RATE RECURRENT EXPENDITURES REVENUE COLLECTION REVENUE INCREASES RISK PREMIUM ROADS SOCIAL RETURN SOCIAL RETURNS SPENDING CUTS SUB-SAHARAN AFRICA TAX TAX BASES TAX COLLECTION TAX RATE TAX REVENUE TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL SPENDING TRANSPARENCY UNCERTAINTY UTILITIES Easterly, William Irwin, Timothy Servén, Luis Walking Up the Down Escalator : Public Investment and Fiscal Stability |
| relation |
Policy Research Working Paper; No. 4158 |
| description |
Fiscal adjustment becomes like walking
up the down escalator when growth-promoting spending is cut
so much as to lower growth and thus the present value of
future tax revenues to a degree that more than offsets the
improvement in the cash deficit. Although short-term cash
flows matter, a preponderant focus on them encourages
governments to invest too little. Cash flow targets also
encourage governments to shift investment spending off
budget, by seeking private investment in public
projects-irrespective of its real fiscal or economic
benefits. To evade the action of cash flow targets, some
have suggested excluding from their scope certain
investments (such as those undertaken by public enterprises
deemed commercial or financed by multilaterals). These
stopgap remedies might sometimes help protect investment,
but they do not provide a satisfactory solution to the
underlying problem. Governments can more effectively reduce
the biases created by the focus on short-term cash flows by
developing indicators of the long-term fiscal effects of
their decisions, including accounting and economic measures
of net worth, and where appropriate including such measures
in fiscal targets or even fiscal rules, replacing the
exclusive focus on liquidity and debt. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Easterly, William Irwin, Timothy Servén, Luis |
| author_facet |
Easterly, William Irwin, Timothy Servén, Luis |
| author_sort |
Easterly, William |
| title |
Walking Up the Down Escalator : Public Investment and Fiscal Stability |
| title_short |
Walking Up the Down Escalator : Public Investment and Fiscal Stability |
| title_full |
Walking Up the Down Escalator : Public Investment and Fiscal Stability |
| title_fullStr |
Walking Up the Down Escalator : Public Investment and Fiscal Stability |
| title_full_unstemmed |
Walking Up the Down Escalator : Public Investment and Fiscal Stability |
| title_sort |
walking up the down escalator : public investment and fiscal stability |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/03/7435956/walking-up-down-escalator-public-investment-fiscal-stability http://hdl.handle.net/10986/7191 |
| _version_ |
1764401588374339584 |
| spelling |
okr-10986-71912021-04-23T14:02:33Z Walking Up the Down Escalator : Public Investment and Fiscal Stability Easterly, William Irwin, Timothy Servén, Luis ACCOUNTING ACCOUNTING STANDARDS ACCRUAL ACCOUNTING ADJUSTMENT PROGRAMS AGGREGATE BUDGET AGGREGATE DEMAND ASSET VALUE BRIBES BUDGET ALLOCATION BUDGET DEPARTMENT BUDGET SURPLUS BUDGETARY MANAGEMENT BUDGETARY RESOURCES BURDEN OF TAXATION CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL EXPENDITURES CAPITAL NEEDS CAPITAL STOCK CASH DEFICIT CASH FLOW CASH FLOWS COMPETITIVE MARKETS COMPOSITION OF EXPENDITURES CORPORATE GOVERNANCE COST OF CAPITAL COST RECOVERY DEBT DEBT CRISIS DEBT DYNAMICS DEFICIT FINANCE DEFICIT FINANCING DEFICITS EDUCATION EXPENDITURES EDUCATION SERVICES ENTITLEMENTS EXPECTED RETURNS EXPENDITURE CUTS EXPENDITURE ITEM EXPENDITURES FINANCIAL ASSETS FINANCIAL MARKET FINANCIAL REPORTING FINANCIAL REPORTS FISCAL ADJUSTMENT FISCAL AGGREGATES FISCAL AUSTERITY FISCAL AUTHORITIES FISCAL DEFICIT FISCAL DISCIPLINE FISCAL INSTITUTIONS FISCAL PERFORMANCE FISCAL POLICY FISCAL POSITION FISCAL PROJECTIONS FISCAL RETRENCHMENT FISCAL RULES FISCAL STABILITY FISCAL STANCE FISCAL STIMULUS FISCAL STRATEGIES FISCAL STRATEGY FISCAL TARGETS FUNGIBILITY GOVERNMENT SOLVENCY GROSS DEBT GROWTH OF PUBLIC SPENDING GROWTH POTENTIAL GROWTH RATES HIGHER INTEREST HIGHER INTEREST RATES INDEPENDENT AUDITOR INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INFRASTRUCTURE SERVICES INVESTMENT DECISIONS INVESTMENT FLOWS INVESTMENT PROJECTS INVESTMENT RISK LATIN AMERICAN LEVEL OF INDEBTEDNESS LIQUIDITY MACROECONOMIC MODEL MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COST MARGINAL EXCESS MARGINAL EXCESS BURDEN MARKET VALUE NET LENDING NET WORTH PERFORMANCE INDICATORS PERFORMANCE TARGETS POLITICIANS POVERTY REDUCTION PRESENT VALUE PRIMARY DEFICIT PRIVATE FIRMS PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PROFITABILITY PROGRAMS PROVISION OF INFRASTRUCTURE PUBLIC PUBLIC CAPITAL PUBLIC CONSUMPTION PUBLIC DEBT PUBLIC ENTERPRISES PUBLIC ENTITIES PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCES PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT PROGRAM PUBLIC INVESTMENT SPENDING PUBLIC INVESTMENTS PUBLIC PROCUREMENT PUBLIC REVENUES PUBLIC SECTOR PUBLIC SECTOR BORROWING PUBLIC SECTOR BORROWING REQUIREMENT PUBLIC SECTOR NET WORTH PUBLIC SECTOR PROJECTS PUBLIC SECTOR RETRENCHMENT PUBLIC SECTOR SOLVENCY PUBLIC SERVICES PUBLIC SPENDING REAL INTEREST RATE RECURRENT EXPENDITURES REVENUE COLLECTION REVENUE INCREASES RISK PREMIUM ROADS SOCIAL RETURN SOCIAL RETURNS SPENDING CUTS SUB-SAHARAN AFRICA TAX TAX BASES TAX COLLECTION TAX RATE TAX REVENUE TAX REVENUES TAXATION TELECOMMUNICATIONS TOTAL SPENDING TRANSPARENCY UNCERTAINTY UTILITIES Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a preponderant focus on them encourages governments to invest too little. Cash flow targets also encourage governments to shift investment spending off budget, by seeking private investment in public projects-irrespective of its real fiscal or economic benefits. To evade the action of cash flow targets, some have suggested excluding from their scope certain investments (such as those undertaken by public enterprises deemed commercial or financed by multilaterals). These stopgap remedies might sometimes help protect investment, but they do not provide a satisfactory solution to the underlying problem. Governments can more effectively reduce the biases created by the focus on short-term cash flows by developing indicators of the long-term fiscal effects of their decisions, including accounting and economic measures of net worth, and where appropriate including such measures in fiscal targets or even fiscal rules, replacing the exclusive focus on liquidity and debt. 2012-06-05T20:47:29Z 2012-06-05T20:47:29Z 2007-03 http://documents.worldbank.org/curated/en/2007/03/7435956/walking-up-down-escalator-public-investment-fiscal-stability http://hdl.handle.net/10986/7191 English Policy Research Working Paper; No. 4158 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |