Publication: Public Expenditure Review of the Palestinian Authority: Towards Enhanced Public Finance Management and Improved Fiscal Sustainability
Loading...
Files in English
697 downloads
Published
2016-09
ISSN
Date
2016-09-29
Author(s)
Editor(s)
Abstract
The difficulty of pursuing a conventional market-oriented development strategy in the Palestinian territories led in the early part of the 2000s to a second-best reliance on public sector employment and wage bill expansion to boost aggregate demand. The main objective of this Programmatic Public Expenditure Review (PER) is to inform policy and institution-building efforts of the Palestinian Authority (PA) and its donor partners about improving the sustainability of public expenditures and the efficacy and efficiency in the provision of essential public services.In particular, this PER aims to provide an assessment of public revenue and expenditure policies offering specific policy and institutional measures to reduce the size of the Palestinian territories fiscal deficit and make it more sustainable.The fiscal situation of the Palestinian Authority is not sustainable.The difficult fiscal situation facing the Palestinian Authority today results from a unique confluence of challenges.As this report will argue, there is considerable further scope for reforms that would raise additional tax revenues, and reduce expenditures without compromising the quality of public services or negatively impacting public welfare.However, the PER notes that there are limits to what can be achieved by PA fiscal policy alone.The PER is organized as follows: Chapter one provides an overview of recent macroeconomic and fiscal developments; it also contains a brief assessment of priority fiscal policy issues facing the PA, and serves as an introduction to the in-depth analysis of the issues that follow in subsequent chapters. Chapter two analyzes the factors driving the size of the PA’s wage bill, and shows how these can be tackled. Chapter three reviews expenditures in the public health sector. Chapter four analyzes the Palestinian public pension system, and looks into how its sustainability can be assured. Chapter five assesses the quality of intergovernmental fiscal transfers, including net lending transfers. Chapter six reviews the way in which public investment projects are planned and implemented, and identifies steps to improve investment quality. Further details on health and pensions are provided in the annexes.
Link to Data Set
Citation
“World Bank. 2016. Public Expenditure Review of the Palestinian Authority: Towards Enhanced Public Finance Management and Improved Fiscal Sustainability. © World Bank. http://hdl.handle.net/10986/25100 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Long-Term Care Policies for Older Populations in New EU Member States and Croatia : Challenges and Opportunities(Washington, DC, 2010-11)The objective of this summary report is to highlight the main lessons learned from Organization for Economic Development and Co-operation (OECD) countries with advanced Long Term Care (LTC) policies and the implications for LTC policymaking in new European Union (EU) member states and Croatia. The first section examines the main findings from the framework report on the financing, provision and regulation of LTC services. The next section presents comparative findings from the four case study countries, including the demographic context for LTC services, the main features of the financing, provision and regulation of LTC services and the strengths and weaknesses of current LTC systems there. The last section identifies policy directions for the four case study countries. In terms of LTC benefits, none of the case study countries have a universal entitlement system combining home, community and institutional care. Rather, LTC benefits, both cash and in-kind, are limited and largely associated with the social assistance system. The lack of data on LTC expenditures mainly stems from the undefined position of LTC between the health and social sectors, which makes it difficult to accurately collect data.Publication FYR Macedonia Public Expenditure Review(World Bank, Washington, DC, 2015-07)FYR Macedonia is a small, open economy with solid economic growth. It reached independence in 1991. Though it was the first among the six countries in South East Europe (SEE6) 7 to gain EU candidate status in 2005, it has not been able to start negotiations for EU accession, partly because of its name dispute with Greece. Yet, EU accession is the main anchor of its reform agenda and all major political parties and over 80 percent of the people support EU membership. Landlocked, with a population of 2.1 million, the country GDP per capita is USD 5371. FYR Macedonia has enjoyed macroeconomic and financial stability during the last decade. Growth has been solid with an annual real GDP per capita growth in PPP terms of 3.7 percent between 2006 and 2014. This was the second highest growth rate among the countries of South East Europe and far above the EU28 average of 1.4 percent during this period, enabling FYR Macedonia to increase its per capita income relative to the EU28 from 30.7 percent in 2006 to 36.6 percent in 2014. Contrary to other SEE6 countries, unemployment in FYR Macedonia has declined since the 2009, yet gains in poverty reduction seem to have been moderate. Fiscal stimulus was largely driven by revenue-reducing measures and public investment. Between 2006 and 2013, general government spending averaged about 34.5 percent of GDP, which is significantly below the SEE6 and the Europe and Central Asia (ECA) average. At the same time, general government revenues declined steeply from 33.8 percent of GDP in 2007 to 27.8 percent in 2014, one of the lowest in the ECA region as the government reduced its rates on the corporate income tax and personal income tax as well as social security contributions. Also, debt financed investments of SOEs increased. As a consequence, public debt increased, undoing the gains of previous fiscal consolidation but enabling FYR Macedonia to sustain growth in times of a difficult external environment.Publication Republic of Serbia Public Finance Review 2015(World Bank, Washington, DC, 2015-06-24)Since the global economic and financial crisis of 2008, Serbia has struggled with a weak economy and a deteriorating fiscal position. Until 2008, fiscal deficits were moderate and public debt declined significantly. Since the start of the global economic and financial crisis in 2008, however, Serbia has struggled with the interlinked problems of minimal growth and unfavorable fiscal dynamics. As economic activity has stagnated, revenues have fallen and expenditures, particularly mandatory spending on pensions and wages, have remained high. At the same time, structural fiscal issues, such as continued state support to state-owned enterprises (SOEs) and tax administration inefficiencies, have been a drag on growth. As a result of these pressures, general government fiscal deficits averaged 5.6 percent of GDP a year between 2009 and 2014. Reflecting the high fiscal deficits and poor economic growth, Serbia’s public debt has more than doubled, from 34 percent of GDP in 2008 to 71 percent at yearend-2014. The objective of this report is therefore two-fold: (i) policy options and recommendations (beyond those built into the current program) that would help solidify the ongoing fiscal consolidation program and help achieve public debt sustainability over the medium term; and (ii) given near-term fiscal constraints, identify opportunities for enhancing the efficiency, quality, and equity of current public spending on health, education, and social protection over the medium termPublication Serbia Public Finance Review(World Bank, Washington, DC, 2015-06-27)Since the global economic and financial crisis of 2008, Serbia has struggled with a weak economy and a deteriorating fiscal position. Until 2008, fiscal deficits were moderate and public debt declined significantly. Since the start of the global economic and financial crisis in 2008, however, Serbia has struggled with the interlinked problems of minimal growth and unfavorable fiscal dynamics. As economic activity has stagnated, revenues have fallen and expenditures, particularly mandatory spending on pensions and wages, have remained high. At the same time, structural fiscal issues, such as continued state support to state-owned enterprises (SOEs) and tax administration inefficiencies, have been a drag on growth. As a result of these pressures, general government fiscal deficits averaged 5.6 percent of GDP a year between 2009 and 2014. Reflecting the high fiscal deficits and poor economic growth, Serbia’s public debt has more than doubled, from 34 percent of GDP in 2008 to 71 percent at yearend-2014. The objective of this report is therefore two-fold: (i) policy options and recommendations (beyond those built into the current program) that would help solidify the ongoing fiscal consolidation program and help achieve public debt sustainability over the medium term; and (ii) given near-term fiscal constraints, identify opportunities for enhancing the efficiency, quality, and equity of current public spending on health, education, and social protection over the medium termPublication Samoa Public Expenditure Review Notes : Taking Stock of Expenditure Trends from FY06-FY12(Washington, DC, 2014-03)Samoa's fiscal position and the structure of its budget have evolved markedly in recent years. Samoa had built up sufficient fiscal space in the early to mid-2000s to be able to respond to a major exogenous shock. The objective of the public expenditure review (PER) notes is to assist the Government of Samoa (GoS) in taking stock of the evolving expenditure trends in recent years and to strengthen the analytical basis for the management of public expenditure. Financial management information systems (FMIS) data was consistently classified and supplemented with project grant and loan related data from ministry of finance accounts to compile a full database of domestically and externally funded expenditure. The analysis of the public wage bill combines FMIS data with data from the payroll system. It also incorporates payroll data from the accounts of the largest public agencies to present approximate estimates of payroll trends for the whole government for the first time. This note will look backwards to take stock of the factors that accounted for fiscal expansion since FY2006, and look ahead to highlight the impact of cyclone Evan on the fiscal position from 2013 onwards. The first part of the note will review trends in public expenditure, revenues, grants, financing, and budget execution to provide insight into which aspects resource allocation have changed the most in real terms from 2006 to 2012, and decompose trends to identify the main drivers of growth in the budget. The second part of the note focuses on the impact of cyclone Evan on Samoa's fiscal position from 2013 onwards, and presents projections of the fiscal path in long-term in light of higher deficit and debt levels.
Users also downloaded
Showing related downloaded files
Publication Public Expenditure Review of the Palestinian Authority(Washington, DC: World Bank, 2025-06-12)Just like every other socio-economic dimension, also the fiscal situation in West Bank and Gaza is shaped by its fragility, conflict and violence (FCV) context. It is difficult to overstate the impact that the Israeli occupation imposes on the economy of the West Bank and Gaza. Along with the recurrent violence,the most important obstacles to Palestinian growth and private-sector development continue to be the Israeli restrictions on movement, economic activity, and access to resources in the West Bank, and the near-total blockade of Gaza since 2007. As such, these factors fundamentally undermine the macroeconomic foundations needed to achieve fiscal sustainability. These constraints are amplified by Israel’s control of the Palestinian borders and of vast swathes of its territory (Area C) which greatly limit the Palestinian ability to collect taxes and conduct an independent and sound fiscal policy. These limitations, in addition to the internal political divide between the West Bank and Gaza, cause the Palestinian Authority (PA) to face a situation of permanent fiscal emergency. Fiscal revenues are structurally unable to cover the large public expenditures needed to maintain the economy and the society afloat. Hence the PA has to rely on foreign aid in order to bridge the financing gap.Publication Mobilizing Private Capital for the Sustainable Development Goals(Washington, DC: World Bank, 2024-07-12)This paper summarizes evidence on financial instruments and regulatory approaches to spur private investment in pursuit of the 2030 Sustainable Developments Goals. Starting from a theoretical framework demonstrating that raising the marginal product of capital is the key to crowding in private investment, it uses Robert Merton’s functional approach to financial intermediation to assess the track record and prospects for five types of instruments/regulatory approaches: guarantees, public-private partnerships, syndicated loans, sustainable financial contracts, and climate and banking regulations and policies. Despite considerable gains in the amount of private investment mobilized by these vehicles, the volumes still fall short of the trillions of dollars estimated to be necessary to achieve the Sustainable Developments Goals. Efforts to share relevant data, encourage more academic research, and publicize and demonstrate the effectiveness of these approaches, much of which is already being undertaken by the World Bank and other multilateral development banks, could be crucial to scale up private capital mobilization.Publication Securing Water for Development in West Bank and Gaza(World Bank, Washington, DC, 2018-06-15)This note aims at describing the most challenging issues that face water and sanitation sector in West Bank and Gaza (WB&G) and highlighting the possible actions that can improve Palestinian water security. The WB&G Water Supply, Sanitation and Poverty Diagnostic (June 6, 2018) study that has been done by the World Bank, which this note depends on its analysis, concluded that WB&G is a water-scarce lower-middle-income territory with a relatively water-dependent economy and is vulnerable within its geopolitical setting; thus, assuring water security is a priority. Water security requires adequate water resources that are well managed, including management of risks, and water service providers (SPs) that provide sustainable, efficient, and equitable services. The goal of water security has been receding in recent years. Therefore, to improve water security, the sector note recommended two pathways; (a) efficient use of natural and financial resources, (b) collaborative solutions within the region and the Palestinians to improve access to water supply and protect resources, and four pillars; (i) addressing water supply and demand gap, (ii) strengthening the water sector institutions, (iii) enhancing the financial viability and sustainability; (iv) attracting other development partners, including strong cooperation and coordination with Israel.Publication Guide for Wastewater Management in Rural Villages in China(World Bank, Washington, DC, 2011-12)There is an urgent need to provide practical guidelines for Chinese decision makers and officials to better understand the key issues and constraints related to rural wastewater management and to identify feasible solutions and tools to improve the performance and sustainability of these projects. To address these needs, the World Bank has developed this guide for wastewater management in rural villages in China. The Guide is intended to be a useful resource for Chinese policy makers and practitioners. It includes a review of historical and current policies and practices related to wastewater management in rural China. The Guide outlines a framework and strategies for establishing municipal and village level wastewater management programs. The overall objective of the guide is to identify key issues and to present effective strategies and approaches to implement sustainable wastewater management programs at the local jurisdictions in order to improve rural sanitation in China. A key objective of the guide is to present institutional, programmatic and technical guidelines that can be adopted by local jurisdictions, forming the basis for consistent, affordable, practical, and effective sanitation project planning, design, implementation, and operations.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.