Public Finance Management and Analysis
Core Course
April 23-27, 2007
JB1-080
Background Readings
General reference:
 World Bank, “Guidelines for the World Bank’s Work on Public Expenditure Analysis
and Support (including PERs),” Public Sector Group, PREM, Draft 2001.
 Bank and IMF, “Bank/Fund Collaboration on Public Expenditure Issues”,
February, 2003.
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World Bank, “Tools to Prepare Persuasive PERs for HD Faster,” HD and PREM, 2005 (a
CD, distributed separately).
Macroeconomics of the Budget: Fiscal Policy, Public Finance
 Stanley Fischer and William Easterly, “The Economics of the Government Budget
Constraint,” the World Bank Research Observer, 1990, pp. 127-142.
 Easterly, William and Luis Serven, eds, “Introduction” in The Limits of
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Stabilization: Infrastructure, Public Deficits, and Growth in Latin America,
Stanford University Press and World Bank, 2003.
World Bank, “Fiscal Policy for Growth and Development: Further Analysis and Lessons
from Country Case Studies,” the World Bank, March, 2007.
World Bank, “Fiscal Policy for Growth and Development: An Interim Report,”
Development Committee Paper, the World Bank, April, 2006.
Stefano Paternostro, Anand Rajaram and Erwin R. Tiongson, “How Does the
Composition of Expenditure Matter,” Oxford Development Studies, Vol. 35, No. 1,
March 2007.
Revenue Policy and Administration
 Richard M. Bird and Eric M. Zolt, “An Introduction to the Design and Development of
Tax Policy in Developing and Transitional Countries” April, 2006.
 Arindam Das-Gupta, “Sources of Government Finance, Their Appropriate Use and
Impact” March, 2004.
 Schaffer, Mark/ Turley, Gerard, “Effective Versus Statutory Taxation: Measuring
Effective Tax Administration in Transition Economies,” EBRD WP 62.
Fiscal Decentralization
 Richard Bird and Michael Smart, “Intergovernmental Fiscal Transfers: International
Lessons for Developing Countries,” World Development, Vol. 30, No. 6, 2002.
 Isabelle Joumard and per Mathis Kongsrud, “Fiscal Relations across Government
Levels,” OECD Economics Department WP No. 375, 2003.
 “Managing Across Levels of Government,” OECD, 1997.
Public Finance Management
 “PEFA Performance Framework,” June, 2005 (a book, distributed separately).
 “An Overview of Public Expenditure Management.”
 SIGMA Policy Brief No. 1: Anatomy of the Expenditure Budget.
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Fiscal Risk
 Brixi, Budina, and Irwin, “Public–Private Partnerships, Fiscal Risks, and Fiscal
Institutions in the EU8,” the World Bank, December 2005.
Education
 March Bils and Peter J. Klenow, “Does Schooling Cause Growth?” American Economic
Review, 2000.
 Barbara Sianesi, “The Returns to Education: Macroeconomics,” Journal of Economic
Surveys, 2003.
Health
 Bloom, Canning, and Jamison, “Health, Wealth and Welfare,” Finance & Development,
March 2004.
 Jyotsna Jalan and Martin Ravallion, “Does Piped Water Reduce Diarrhea for Children in
Rural India?” Journal of Econometrics, 2003.
 Hammer, Filmer and Pritchett: “Weak Links in the Chain II: A Prescription for Health
Policy in Poor Countries,” World Bank Research Observer, 2002.
 “Health Financing Revisited” (a summary, distributed separately).
Social Protection
 Dominique Van De Walle, “Assessing the Welfare Impacts of Public Spending,” World
Development, 1998.
Infrastructure
 Edward Gramlich, “Infrastructure Investment: A Review Essay,” Journal of Economic
Literature, 1994.
 Felix K Rioja, “The Penalties of Inefficient Infrastructure,” Review of Development
Economics, 2003.
Agriculture
 Gershon Feder, “Review of Public Expenditure in Agriculture, An Annotated Checklist”
the World Bank, February, 2006.
Additional Readings
Fiscal Policy
 Alberto Alesina and Roberto Perotti, "Fiscal Adjustment in OECD Countries:
Composition and Macroeconomic Effects." NBER WP 5730, 1996.
 Alberto Alesina and Buido Tabellini, "Why is Fiscal Policy Often Procyclical?" Harvard
University, 2005.
 Martin Hallet, "Fiscal Effects of Accession in the New Member States" European
Commission, 2004.
 Ludger Schuknecht, "EU Fiscal Rules Issues and Lessons from Political Economy,"
European Central Bank WP No.421, 2004.
Public Expenditure and Growth
 Robert J. Barro, "Government Spending in a Simple Model Endogenous Growth,"
Harvard University and NBER, 2005.
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Shantayanan Devarajan, Vinaya Swaroop, and Heng-fu Zou, "The Composition of Public
Expediture and Economic Growth," Journal of Monetary Economics, 1996.
Christopher S.Adam and David L.Bevan, "Fiscal Deficits and Growth in Developing
Growth," Oxford University, 2005.
Michael Bleaney, Norman Gemmell, and Richard Kneller, "Testing the Endogenous
Growth Model: Public Expenditure, Taxation, and Growth over the Long Run,"
University of Nottingham, University of Melbourne, and the National Institute of
Economic and Social Research.
Public Expenditure Analysis
 Paul Atkinson and Paul van den Noord, "Managing Public Expenditure: Some Emerging
Policy Issues and a Framework for Analysis," OECD, 2001.
Performance-Based Budgeting
 Christopher Pollitt, "Integrating Financial Management and Performance Management,"
OECD, 2001.
 Jack Diamond, "Performance Budgeting and Managing the Reform Process," Fiscal
Affairs Department, IMF, 2003.
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Recommended Readings
Macroeconomics of the Budget: Fiscal Policy, Public Finance
o Agenor, P. and Peter Montiel. Chapter 4, 8 and 15, Development Macroeconomics. Princeton:
Princeton University Press, 1996.
o Tanzi, Vito and Howell H. Zee. “Fiscal Policy and Long-Run Growth.” IMF Working Paper No.
96/119, October, 1996.
o Zagler, Martin and Georg Durnecker. “Fiscal Policy and Economic Growth.” Journal of Economic
Surveys, Vol. 17, Issue 3, 2003
o Easterly, William, Tim Irwin and Luis Serven. “Public Investment and Fiscal Stability.” LAC
Regional Study on Fiscal Space, Summary Paper, World Bank. 2006.
o Nijkamp, & Poot, “Meta-analysis of the effect of fiscal policies on long-run growth,” European
Journal of Political Economy, 2004.
Revenue Policy and Administration
o Arindam Das-gupta, “The Income Tax Compliance Cost of Corporations in India, 2000-01,”
2003.
o Arindam Das-gupta, “The Compliance Cost of the Personal Income Tax in India, 2000-01:
Preliminary Estimates” 2003.
o Vito Tanzi, Howell Zee, “Tax Policy for Developing Countries,” IMF.
o Mitra, Pradeep, and Nicholas Stern, “Tax Systems in Transition,” WPS, World Bank, October
2002.
Public Finance Management
o Budget Systems & Expenditure Classifications.
o The Budget Preparation process.
(http://www1.worldbank.org/publicsector/pe/PEAMMarch2005/materials.htm)
o Procurement and corruption -Philippines
Fiscal Risk
o Brixi and Schick, “Government at Risk,” World Bank, 2002
o Brixi, “Contingent government liabilities: A Hidden Risk for Fiscal Stability.” Policy Research
Working Paper 1989, World Bank. 1998
Education
o Pritchett, “Where has all the Education Gone?”
o Education and Growth and Equity Needed.
Health
o Marginal Budgeting for Bottlenecks.
Social Protection
o Dominique Van De Walle, “Behavioral Incidence Analysis of Public Spending and Social
Programs”
Infrastructure
o World Bank, “Argentina Reforming Policies and institutions for efficiency and equity of public
expenditures”, 2003.
o World Bank, “Colombia: Recent Economic Developments in Infrastructure (REDI) Balancing
social and Productive Needs for Infrastructure,” 2004.
o Public risk bearing in privately financed infrastructure (excerpt)
o Calderon, Cesar and Luis Serven. “The Effects of Infrastructure Development on Growth and
Income Distribution.” World Bank Policy Research Paper, WPS3400, 2004.
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