The Political Economy of Revenue-Forecasting Experience From Low-Income Countries
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper analyzes interference and timeliness in the revenue-forecasting process, using new data on revenue-forecasting practices in low-income countries. Interference is defined as the occurrence of a significant deviation from purely technical forecasts. A theoretical model explains forecasting interference through government corruption. The data broadly supports the model, and the results are robust to alternative explanations. The paper also constructs three indices-transparency, formality, and organizational simplicity-that characterize revenue-forecasting practices, and assesses their effectiveness in producing an upfront-that is, timely-budget envelope. More transparent and simple forecasting processes lead to early budget constraints, while formality has no measurable effect.
Series:
Working Paper No. 2005/002
Subject:
Budget planning and preparation Corruption Crime Expenditure Public financial management (PFM) Revenue administration Revenue forecasting Tax policy
English
Publication Date:
January 1, 2005
ISBN/ISSN:
9781451860214/1018-5941
Stock No:
WPIEA2005002
Pages:
31
Please address any questions about this title to publications@imf.org