Cover IMF Working Papers
Revenue Forecasts as Performance Targets
Author: Mr. Stephan Danninger
Series:
IMF Working Papers
Volume/Issue:
Volume 2005: Issue 014
Language:
English
Publication Date:
01 Jan 2005
DOI:
https://doi.org/10.5089/9781451860337.001
ISBN:
9781451860337
ISSN:
1018-5941
Pages:
20
Keywords:
WP; revenue; administration; outturn; budget
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Budget revenue forecasts should be best estimates of expected receipts. Often they are not. This paper analyzes the rationale for overstated revenue forecasts and derives conditions for intentional biases. A theoretical model demonstrates that overstated revenue forecasts can be the result of the government's attempt to boost unobserved revenue collection effort. If positive forecast errors are costly and undermine public credibility of budget expenditure plans, the reverse outcome is possible and governments may understate revenue forecasts. A case study for Azerbaijan is presented in support of the former incentive motive.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund