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Fiscal indicators for resource-rich and resource-poor low- and middle-income countries are compared using annual data from 1996 to 2012. Resource richness is defined by export composition: fuel greater than a 25 percent share and/or ores and metals greater than a 10 percent share. Fuel exporters have a significantly better general government fiscal balance than the rest of the sample, and higher revenues and expenditures, which are approximately evenly split between extra consumption expenditure and extra capital expenditure. Only about a quarter of their extra revenue goes into extra consumption expenditure, and this proportion has been lower since 2005. Fuel exporters' expenditure reacts with a lag to oil price fluctuations. There are no significant differences between ores and metals exporters and resource-poor countries, or between new and old resource exporters, in aggregate expenditures and revenues. Ores and metals exporters spend more on investment and less on government consumption. Some individual country cases are briefly discussed.

Currencies and Exchange Rates --- Debt Markets --- Economic Theory & Research --- Emerging Markets --- Finance and Financial Sector Development --- Fiscal Balance --- Fuel --- Government Expenditure --- Government Revenue --- Macroeconomics and Economic Growth --- Markets & Market Access --- Metals --- Natural Resources --- Oil --- Ores --- Private Sector Development

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This paper explores the determinants of public employment across the world and finds that it is negatively associated with country size (by population) and positively associated with the income level. The findings show that a country's openness to trade is positively associated with public employment in low- and middle-income countries, but inversely related in high-income countries. The estimated models are used to predict the expected public employment for a country given its income, population, and openness to trade, and to compare the actual levels with the predicted ones. In general, public employment in Latin American countries is below the predicted levels, except for Argentina, Brazil, Ecuador, Mexico, Suriname, Trinidad and Tobago, and the Republica Bolivariana de Venezuela. Public employment in the Middle East and North Africa is above the predicted levels, particularly in the Arab Republic of Egypt and the Islamic Republic of Iran. East Asian and Pacific countries' public employment is significantly below the predicted levels, particularly in Hong Kong SAR, China; Japan; the Republic of Korea; and Mongolia. Countries in Europe and Central Asia show higher than predicted public employment, mostly in Romania, Denmark, Sweden, Armenia, and Belorussia. Public employment in Sub-Saharan Africa appears to be below the predicted levels, with the notable exceptions of Botswana and South Africa. The deviations from predicted levels are positively correlated with the union density rate, which is negatively associated with private employment rates. Finally, the study finds no statistical association between public and private employment, suggesting the absence of crowding-out in the employment levels.

Crowding Out --- Governance --- Government Expenditure --- Government Size --- Labor Markets --- Openness --- Politics and Government --- Public Employment --- Public Sector Development --- Public Sector Employment --- Social Protections and Labor --- Unions --- Wagner's Law

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The goal of this paper is to understand better, at the empirical level, how public spending contributes to growth by focusing on both the level and composition of public spending, in connection to the dynamics of GDP per capita growth. It attempts to answer two specific questions: (a) What are the policy conditions under which public spending contributes positively to growth? and (b) What are the public spending components that have a stronger and longer-lasting impact on growth? The analysis is applied to a sample of seven fast-growing developing countries: Korea, Singapore, Malaysia, Thailand, Indonesia, Botswana, and Mauritius, which have been among the top performers in the world in terms of GDP per capita growth during the period (1960-2006). The rationale for this country sample selection is twofold. The first hypothesis is that, given their positive growth achievements over a relatively long time period, perhaps it is more straightforward to establish a link to public spending in those countries. Second, it is expected that the findings of the analysis will provide lessons regarding the level and composition of public spending that can be useful for other countries where growth has been less rapid. Assessing what role public spending has played in a dynamic growth context may indeed be enlightening for other cases as well. The paper is structured as follows. The first section is an introduction that provides relevant facts and information about the seven countries during the period of analysis, based on seven individual country case studies. Section II presents the theoretical background behind the empirical analysis. Section III focuses on the empirical methodology, function specification, and variables selected. Section IV is dedicated to the results obtained with the cross-country analysis and some specific country results, as well as some comparisons with previous findings by other authors. Finally, Section V draws policy implications and concludes.

Allocation --- Composition of public spending --- Debt Markets --- Economic Theory and Research --- Finance and Financial Sector Development --- Fiscal policy --- Government expenditure --- Inequality --- Macroeconomics and Economic Growth --- Poverty Reduction --- Poverty reduction --- Pro-Poor Growth --- Public disclosure --- Public expenditure --- Public finance --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- Public spending --- Uncertainty

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The goal of this paper is to understand better, at the empirical level, how public spending contributes to growth by focusing on both the level and composition of public spending, in connection to the dynamics of GDP per capita growth. It attempts to answer two specific questions: (a) What are the policy conditions under which public spending contributes positively to growth? and (b) What are the public spending components that have a stronger and longer-lasting impact on growth? The analysis is applied to a sample of seven fast-growing developing countries: Korea, Singapore, Malaysia, Thailand, Indonesia, Botswana, and Mauritius, which have been among the top performers in the world in terms of GDP per capita growth during the period (1960-2006). The rationale for this country sample selection is twofold. The first hypothesis is that, given their positive growth achievements over a relatively long time period, perhaps it is more straightforward to establish a link to public spending in those countries. Second, it is expected that the findings of the analysis will provide lessons regarding the level and composition of public spending that can be useful for other countries where growth has been less rapid. Assessing what role public spending has played in a dynamic growth context may indeed be enlightening for other cases as well. The paper is structured as follows. The first section is an introduction that provides relevant facts and information about the seven countries during the period of analysis, based on seven individual country case studies. Section II presents the theoretical background behind the empirical analysis. Section III focuses on the empirical methodology, function specification, and variables selected. Section IV is dedicated to the results obtained with the cross-country analysis and some specific country results, as well as some comparisons with previous findings by other authors. Finally, Section V draws policy implications and concludes.

Allocation --- Composition of public spending --- Debt Markets --- Economic Theory and Research --- Finance and Financial Sector Development --- Fiscal policy --- Government expenditure --- Inequality --- Macroeconomics and Economic Growth --- Poverty Reduction --- Poverty reduction --- Pro-Poor Growth --- Public disclosure --- Public expenditure --- Public finance --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- Public spending --- Uncertainty

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Limited fiscal space limits Djibouti's ability to meet the Millennium Development Goals and improve the living conditions of its population. Djibouti's fiscal structure is unique in that almost 70 percent of government revenue is denominated in foreign currency (import taxes, foreign aid grants, and military revenue) while over 50 percent of government expenditure is denominated in local currency (wages, salaries, and social transfers). Djibouti's economic structure is also unusual in that merchandise exports of local origin are insignificant, and the country relies heavily on imported goods (food, medicines, consumer and capital goods). A currency devaluation, by reducing real wages, could potentially generate additional fiscal space that would help meet Djibouti's fundamental development goals. Using macroeconomic and household level data, the authors quantify the impact of a devaluation of the nominal exchange rate on fiscal savings, real public sector wages, real income, and poverty under various hypothetical scenarios of exchange-rate pass-through and magnitude of devaluation. They find that a currency devaluation could generate fiscal savings in the short-term, but it would have an adverse effect on poverty and income distribution. A 30 percent nominal exchange rate devaluation could generate fiscal savings amounting between 3 and 7 percent of GDP. At the same time, a 30 percent nominal devaluation could cause nearly a fifth of the poorest households to fall below the extreme poverty line and pull the same fraction of upper middle-income households below the national poverty line. The authors also find that currency devaluation could generate net fiscal savings even after accounting for the additional social transfers needed to compensate the poor for their real income loss. However, the absence of formal social safety nets limits the government's readiness to provide well-targeted and timely social transfers to the poor.

Accounting --- Bank Policy --- Currencies and Exchange Rates --- Currency Devaluation --- Debt Markets --- Devaluation --- Developing Countries --- Economic Development --- Economic Stabilization --- Economic Theory and Research --- Emerging Markets --- Exchange --- Exchange Rate --- Expenditures --- Finance and Financial Sector Development --- Financial Literacy --- Fiscal and Monetary Policy --- Foreign Currency --- Goods --- Government Expenditure --- Government Revenue --- Labor Markets --- Local Currency --- Macroeconomics and Economic Growth --- Poverty --- Poverty Reduction --- Private Sector Development --- Public Sector Development --- Real Exchange Rate --- Revenues --- Rural Development --- Rural Poverty Reduction --- Safety Nets --- Taxes