Fiscal Reform: Case Studies

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This page features several case studies of USAID/US Government project interventions that have been effective in promoting fiscal reform in developing and transition countries. These approaches and interventions have been, or could be, adapted to similar needs in other jurisdictions. Thus, the target audience includes USAID officers, host country fiscal officers, other donors and anyone interested in what has been learned through fiscal management assistance projects in various parts of the world.

Government operations constitute a significant proportion of all economic activity in all countries, and are a major influence on aggregate economic performance. Its size gives government the potential to promote and reinforce economic stability and progress. Yet experience shows that in transitioning and emerging economies, government fiscal operations often impede, rather than promote, economic stability and growth.
 
A government's success in realizing its goals, objectives and priorities depends importantly on its ability to: (1) translate them into budgeted expenditures; (2) find the financing for those expenditures; and (3) implement the corresponding programs. Governments have often discovered this truth only after they discover that they are unable to complete one or more of the three steps adequately. If the discovery comes late, it may be too late to avert a fiscal crisis.
 
Since its origin in the post-World War II Marshall Plan, USAID has offered assistance to client states in fiscal reform. As the Agency has gained experience through assisting rebuilding, emerging and transition economies, it has learned valuable lessons about what works. Today, USAID’s approach to technical assistance in fiscal reform tries to incorporate and build on these lessons. Briefly, the lessons are these: (1) the host government must “own” the project; (2) fiscal “reform” takes a long time; and (3) “reform” must be embraced by all the key stakeholders.
 
The case studies that follow showcase USAID and broader USG-funded assistance programs that helped strengthen government planning, management and control of expenditures and revenues—i.e., fiscal reform—and the processes and structures through which those programs were implemented. Click on links to the right to view and select from among those country cases.