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PublicationImplementing Public Expenditure Tracking Surveys for Results : Lessons from a Decade of Global Experience(World Bank, Washington, DC, 2009-11) Gurkan, Asli; Kaiser, Kai; Voorbraak, DorisPublic Expenditure Tracking Surveys (PETS) can serve as a powerful tool to inform prevailing public financial management (PFM) practices and the extent to which government budgets link to execution and desired service delivery objectives and beneficiaries. Since the first PETS in Uganda in 1996, tracking exercises have now been conducted in over two dozen other countries, often as part of core analytical and advisory work related to PFM. This note synthesizes the findings and lessons from a number of recent PETS stocktaking exercises and indicates their potential benefits for enriching PFM and sectoral policy dialogues in a variety of country settings. Key findings include: (i) PETS have proven to be useful as part of a broader policy strategy aimed at improving service delivery results; (ii) PETS has become a brand name for very different instruments, but at its core there is a survey methodology that requires skilled technical expertise and a solid knowledge of budget execution processes; (iii) policy impact in a variety of PETS experiences could be further strengthened by stronger country ownership and effective follow-up; and (iv) the Bank could enhance PETS results through strategic partnering, and greater emphasis on dissemination and communication strategies aimed at involving actors who can foster actions on the ground. PublicationSalary Bonuses in Revenue Departments : Do They Work?(World Bank, Washington, DC, 2004-01) De Wulf, LucCompensation provides a major incentive for workers to perform well. Accordingly, bonus payments are often used to enhance staff effectiveness and efficiency-and have become increasingly common in revenue departments around the world. A recent World Bank study analyzed the bonus systems applied by revenue authorities in seven countries, and was complemented by questionnaires completed by tax and customs administrations in seven others. Though the sample was small, the study generated interesting findings and points to areas requiring further analysis. The countries analyzed indicate that bonus systems are fraught with danger and so must be designed with the utmost care. There is no evidence that bonuses automatically increase the effectiveness of revenue departments. And because staff performance is influenced by factors other than salaries and bonuses, it is not easy to determine the effects of such systems. This note reviews reasons for introducing bonus systems and discusses a number of crucial design features, particularly the importance of effective and transparent performance appraisal systems based on clear performance measures. PublicationWhy Worry About Tax Expenditure?(World Bank, Washington, DC, 2003-01) Swift, Zhicheng Li; Cavalcanti, Carlos B.Tax expenditures are concessions that fall outside tax norms or benchmarks. These norms include accounting conventions, the structure of tax rates, the deductibility of compulsory payments, provisions to facilitate tax administration, and norms related to international fiscal obligations. Tax expenditures are deviations from these norms, implemented to encourage behavior deemed desirable by policymakers, and can take a number of forms-including tax exemptions, allowances, credits, deferrals, and relief (see OECD 1996). The classic example is a tax deduction for charitable contributions, where the reduction in tax revenue is more than offset by the increase in support for charitable activities. Tax expenditures are not a free lunch, however. They can lead to inefficiencies and inequities, stimulating no additional activity and making the tax regime more regressive. For instance, a tax concession granted to employers who hire unskilled workers might go to employers who would have hired such workers anyway. Tax expenditures also affect government budgets, because they imply forgoing revenue that could be used to fund direct government expenditures. PublicationReforming the Courts : The Role of Empirical Research(World Bank, Washington, DC, 2002-03) Hammergren, LinnWorking with local researchers, World Bank staff recently analyzed a random sample of cases filed in the first instance courts of Argentina and Mexico. (First instance or trial courts make the initial rulings on cases based on both facts and law. Higher instance or appeals courts are often restricted to questions of law and so may not reconsider the facts of a case.) The Mexico study was conducted in the Federal District, the largest of Mexico's 32 local and state jurisdictions, and reviewed 464 debt collection cases brought under a special procedure that provides for rapid dispute resolution. In Argentina a stratified sample of criminal, civil, and labor cases was drawn from trial courts in the national capital, Buenos Aires (600 cases), and in the province of Santa Fe (450 cases). In both countries the identities of the parties, the nature of the cases, the amounts at issue, the times to disposition, and other data from the case files were coded and analyzed. Aggregate statistics kept by the judiciary and information from interviews and focus groups were used to help interpret the case file findings. Both studies revealed that when it comes to the operation of Latin American justice systems, much of what experts "know" is incorrect. Because this conventional wisdom often informs judicial reform projects, it can encourage changes aimed at solving nonexistent problems-while ignoring real ones. PublicationIntroducing a Value Added Tax : Lessons from Ghana(World Bank, Washington, DC, 2001-12) Chapman, EmmaIn 1998 Ghana's government successfully introduced a value added tax (VAT). But this success followed a failed attempt in 1995, when the country's first VAT was repealed after just three and a half months. Ghana's experience provides several lessons for the successful introduction of a VAT-particularly the importance of recognizing public sensitivity to changes in the tax system and of securing public acceptance when introducing a VAT. A VAT's introductory rate has a big influence on public opinion, but so do public education and management of public expectations. In addition, political commitment- in terms of both an enabling macroeconomic environment and the enactment of legislation-is crucial for securing popular support and ensuring the timely introduction of a VAT. PublicationStrengthening Peru's Tax Agency(World Bank, Washington, DC, 2001-11) Taliercio, Robert; Engelschalk, MichaelThe reforms were remarkably successful: by 1997 internal tax revenue had recovered to 13 percent of GDP-despite an extremely difficult political and economic environment-and 90 percent of large corporate taxpayers surveyed believed that taxpayer services had improved. The reforms had several key elements: granting the National Tax Administration Superintendency (SUNAT) meaningful administrative and financial autonomy, implementing radical personnel reform, investing in infrastructure and information technology, and generating public support. The reforms also forged a new relationship between taxpayers and the tax agency and committed to improving services. At the same time, the agency made clear its intention to enforce compliance with the tax code. SUNAT's experience offers several lessons for tax administration reform in other countries. First, the immediate efficacy of SUNAT as a semiautonomous revenue authority was due to a combination of several factors, perhaps the most important of which was a coupling of political leadership with managerial expertise. But Peru's experience also highlights pitfalls to avoid for other countries engaging in tax administration reform. PublicationImproving Taxpayer Service and Facilitating Compliance in Singapore(World Bank, Washington, DC, 2000-12) Bird, Richard M.; Oldman, OliverOver the past ten years, the government of Singapore has sought to modernize and computerize Singapore. Tax administration was one area of public administration that clearly required modernization. In 1992 the Inland Revenue Authority of Singapore (IRAS) was created to administer income and property taxes and a new value added tax called the Goods and Services Tax. Planning began to develop an integrated, computerized approach tax administration, which was soon reorganized on functional lines. This process has had made impressive results. In a survey, 95 percent of individual taxpayers, 83 percent of corporate taxpayers, and 93 percent of goods and services taxpayers said they were satisfied with IRAS services. This note discusses what Singapore has done to improve the taxpayer service and how it was done. PublicationHow Should Fiscal Policy Be Set Over the Business Cycle?(World Bank, Washington, DC, 2000-11) Talvi, ErnestoSeveral generations of economists have analyzed the relationship between fiscal policy and the business cycle. How is fiscal policy actually conducted over the business cycle? From a public policy point of view, the interpretation based on credit market imperfections calls for ensuring that developing countries retain access to international credit markets in bad times. At the domestic level, effective liquidity management and intertemporal solvency of fiscal accounts have been emphasized for countries to avoid being cut off from international credit markets in bad times. PublicationPrivate Infrastructure, Public Risk(World Bank, Washington, DC, 1998-11) Thobani, MateenThis economic policy note presents the dilemma between private infrastructure and public risk. The note examines the fact that, increasingly, governments in many developing countries are relying on the private sector to provide infrastructure services, thus being forced - because of policy shortcomings - to assume risks that private investors should bear. However, through the improvement in policies, such as risk reduction and guarantee improvement, governments can avoid these risks, while attracting private infrastructure investment. Guidelines are provided for allocating risk, where two factors are determined: 1) the degree of influence in the control of such risk; and, 2) the ability to bear risk. However, since these factors may adversely react, other factors are considered as well, such as regulatory, quasi-commercial risks, construction cost risks, in addition to exchange and interest rates risks. The adoption of accrual accounting measures is suggested as a crucial step for the improvement in guarantee management.