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International Monetary Fund
The Joint Staff Advisory Note (JSAN) of the Poverty Reduction Strategy Paper Progress Report for the Lao People’s Democratic Republic (PDR) reviews the strengths and weaknesses of poverty reduction objectives and strategies. The Lao PDR National Growth and Poverty Eradication Strategy (NGPES) is the first full poverty reduction strategy prepared by the government. The NGPES describes the participatory process underpinning the development of the strategy. Capacity constraints, weak governance, and a difficulty translating strategic objectives into concrete actions are the main obstacles to the reform process.
Sven B. Kjellstrom and and Ayité-Fily d’Almeida

This paper examines the trade and pricing policies in world agriculture. In the United States, the government pays farmers not to grow cereals and in the European Community, farmers are paid to grow more. Many have raised nominal producer prices but followed macroeconomic and exchange rate policies that left real producer prices unchanged or lower than before. Many have set up complex systems of producer taxation, and then established equally complex and frequently ineffectual systems of subsidies for inputs to offset that taxation.

International Monetary Fund

. Coordinating and synchronizing external technical assistance with the government’s budget cycle is a good practice to emulate, to the extent feasible. In addition, predictable donor resource flows can enhance the credibility of budgets in aid-dependent countries. Improved collaboration between the Bank and the Fund can also be promoted through more systematic sharing of information and work plans, and through more frequent cross-participation in missions. It should be recognized, however, that even significantly enhanced collaboration between the Fund and the Bank would not

International Monetary Fund. African Dept.

entrepreneurship (employment and empowerment) 6.2 Sports 6.3 Addressing migration challenges Cluster Seven: Addressing vulnerabilities and building resilience 7.1 Building national environmental resilience 7.2 Forestry management and wetland conservation 7.3 Improving disaster management governance Cluster Eight: Plan implementation 8.1 Implementation arrangements 8.2 Financing the plan 8.3 Donor resource flow 8.4 Resource mobilization strategy 8.5 Risks and mitigating strategies 8.6 Monitoring and evaluation 8.7 Strengthening statistical

Dean T. Jamison and Steven Radelet

also helped with donor resource mobilization. The growth in ODA for primary education suggests that resources can be mobilized through traditional institutions, although substantially more funding will be needed, including for the FTI’s Catalytic Fund, to achieve universal primary education. The tight focus of vertical programs facilitates the diffusion of best practice, accountability, performance measurement, and communication to political stakeholders. Such programs help ensure that ODA resources actually expand a critical activity rather than substituting for

International Monetary Fund

other hand, in Albania, the Government’s MTEF framework for 2003-05 was originally much more optimistic (on growth and revenues) than that of the Fund, but the differences were reconciled for the 2003 Fund-supported program, with the Bank providing input on sectoral priorities for the budget. For many low-income countries, the unpredictability of donor resource flows is a major problem for establishing a credible MTEF. Improved donor coordination and more stable donor financial commitments would help mitigate this problem. From the standpoint of the Bank and the Fund

Hulya Ulku and Mr. Tito Cordella
Under what conditions should grants be preferred to loans? To answer this question, we present a simple model à la Krugman (1988) and show that, for any given level of developmental assistance, the optimal degree of loan concessionality is positively associated with economic growth if countries are poor, have bad policies, and high debt obligations. We then test our model by estimating a modified growth model for a panel of developing countries, and find evidence supporting our predictions. Finally, we assess the determinants of current aid allocations and find that the degree of concessionality is negatively correlated with countries' levels of development.
Mr. Sanjeev Gupta, Mr. Robert Powell, and Yongzheng Yang

the required adjustment will clearly vary from country to country, depending on constraints on domestic policies and assumed donor resource flexibility, but its aim would be to provide an advisable borrowing (and lending) strategy consistent with the requirements of scaling up that limits the risk of debt stress and is supported by a sound macroeconomic framework and debt-management institutions. 25 The basic ingredient of a sustainable debt strategy for scaling-up countries is to seek to maximize the concessionality of a country’s external financing. The IMF and

Yongzheng Yang, Mr. Robert Powell, and Mr. Sanjeev Gupta
This paper surveys the economic literature on the scaling-up of aid to Africa. It provides a checklist of issues that need to be considered when preparing a long term macroeconomic projection for a country involving the assumption of a significant increase in aid. Such scaling-up scenarios are most likely to be developed in the context of a country's efforts to achieve the Millennium Development Goals (MDGs) with the support of the international donor community. The paper stresses that when preparing a scaling-up scenario it is critical to have a detailed understanding of the likely use of additional aid flows.