World Bank2012-03-192012-03-192010-09-27https://hdl.handle.net/10986/3009This public expenditure review (PER) was conducted at the request of the Ministry of Finance (MoF) on behalf of the Government of the Republic of Latvia. The objective of the PER is to identify potential areas of further budget savings in public administration and the social sectors that could help restore fiscal balance, speed Latvia's recovery from the current crisis, and help it to meet the Maastricht Criteria by 2012 so it can adopt the Euro in 2014. The remainder of this volume is structured in the following way. Section two recounts the events and circumstances that set the Government's fiscal stance in the years prior to the crisis. Section three summarizes the principal emergency measures the Government took to cope during 2008 and 2009 as the crisis broke and led to Latvia's severe economic contraction. The purpose of these sections which draw liberally from material prepared by the financial authorities, the International Monetary Fund (IMF) and the European Central (EC) is to make the case for further fiscal adjustment plain. The report then summarizes the main messages and highlights the most important suggestions made in each of the longer, more detailed chapters of volume two of the review. Each section is followed by a matrix of the options presented for the Government to take into consideration. Given the important role that municipalities and republican cities play in the delivery of social services, the chapter three of volume two provides an in depth examination of local government finances and spending. Local authorities (municipalities and republican cities) play such a prominent role in the delivery of public services particularly social services that a close look at the character of their spending is critical.CC BY 3.0 IGOADMINISTRATIVE COSTSADMINISTRATIVE EXPENSESADMINISTRATIVE FUNCTIONSADMINISTRATIVE STRUCTUREAMALGAMATIONANNUAL AVERAGE RATEAUTOMATIC STABILIZERSBASELINE SCENARIOBENEFICIARIESBUDGET ALLOCATIONSBUDGET BALANCEBUDGET DEFICITBUDGET DEFICITSBUDGET INSTITUTIONSBUDGET PREPARATIONBUDGET PROCESSBUDGET REDUCTIONSBUDGET SYSTEMBUDGET TRANSFERSCAPITAL EXPENDITURECAPITAL FLIGHTCDSCENTRAL BANKCENTRAL BUDGETCENTRAL CONTROLSCENTRAL GOVERNMENTCIVIL SERVANTSCIVIL SERVICECOMPETITIVE PROCUREMENTCORPORATE INCOME TAXCORPORATE PROFITSCOST-BENEFIT ANALYSISCOST-RECOVERYCREDIT DEFAULTCREDIT DEFAULT SWAPCREDIT GROWTHCURRENCYCYCLICAL SWINGSDEBTDEBT SERVICINGDEPENDENT POPULATIONDOMESTIC DEMANDECONOMIC CONDITIONSECONOMIC DOWNTURNECONOMIC DOWNTURNSECONOMIC GROWTHECONOMIES OF SCALEEDUCATION BUDGETEDUCATION POLICYEDUCATION PROGRAMSEFFICIENCY GAINSEXCHANGE RATEEXCHANGE RESERVESEXPENDITURE CUTSEXPENDITURE DATAEXPENDITURE LEVELSEXPENDITURE POLICIESEXPENDITURESEXTERNAL BORROWINGEXTERNAL DEBTFINANCIAL CAPACITYFINANCIAL CRISISFINANCIAL INTERMEDIATIONFINANCIAL MARKETSFISCAL ACCOUNTSFISCAL ADJUSTMENTFISCAL BALANCEFISCAL CONSEQUENCESFISCAL CONSOLIDATIONFISCAL COSTFISCAL DEFICITFISCAL DEFICITSFISCAL IMBALANCESFISCAL POLICYFISCAL POSITIONFISCAL SAVINGSFISCAL STANCEFISCAL SUSTAINABILITYFISCAL TARGETFISCAL TARGETSFOREIGN DIRECT INVESTMENTSFOREIGN EXCHANGEGOVERNMENT DEFICITGOVERNMENT EXPENDITUREGOVERNMENT FINANCEGOVERNMENT FUNDINGGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROSS FIXED CAPITAL FORMATIONGROWTH RATEHEALTH CAREHEALTH INSURANCEHEALTH OUTCOMESHEALTH POLICYHEALTH PROBLEMSHEALTH SECTORHEALTH SERVICESHEALTH SPENDINGHOSPITAL SERVICESHUMAN DEVELOPMENTINFLATIONINSURANCE MARKETINSURANCE PENSIONSINTEREST PAYMENTSINTEREST RATEINTEREST RATESLABOR TAXESLOCAL FINANCINGLOCAL GOVERNMENTLOCAL GOVERNMENT BUDGETSLOCAL GOVERNMENT REVENUELOCAL GOVERNMENT REVENUESLOCAL GOVERNMENTSLOTTERYMACROECONOMIC CONTROLMACROECONOMIC FRAMEWORKMACROECONOMIC MANAGEMENTMARKET PRICESMEDICAL SERVICESMEDICAL TREATMENTMINISTRY OF FINANCEMONETARY FUNDMUNICIPAL GOVERNMENTSMUNICIPAL HOSPITALSMUNICIPALITIESNATIONAL GOVERNMENTNATURAL RESOURCESNET LENDINGNET SPENDINGOPERATIONAL COSTSPERSONAL INCOMEPERSONAL INCOME TAXPERSONAL INCOME TAXESPERVERSE INCENTIVESPRIVATE INSURANCEPUBLIC ADMINISTRATIONPUBLIC DEBTPUBLIC EMPLOYEESPUBLIC EMPLOYMENTPUBLIC EXPENDITUREPUBLIC EXPENDITURE REVIEWPUBLIC EXPENDITURESPUBLIC FINANCEPUBLIC FINANCESPUBLIC FINANCIAL MANAGEMENTPUBLIC HEALTHPUBLIC PENSIONPUBLIC PRIVATE PARTNERSHIPSPUBLIC RESOURCESPUBLIC SECTORPUBLIC SECTOR EMPLOYMENTPUBLIC SECTOR SPECIALISTPUBLIC SECTORSPUBLIC SERVICEPUBLIC SERVICESPUBLIC SPENDINGPUBLIC TRANSPORTREAL ESTATE TAXRESOURCE MANAGEMENTREVENUE GROWTHREVENUE POLICYSAFETY NETSALES TAXSECTOR BUDGETSSECTOR POLICYSECTOR PROGRAMSSERVICE DELIVERYSERVICE LEVELSSERVICE PROVISIONSMALL MUNICIPALITIESSOCIAL ASSISTANCESOCIAL BENEFITSSOCIAL INSURANCESOCIAL POLICYSOCIAL PROTECTIONSOCIAL RETURNSOCIAL RETURNSSOCIAL SECURITYSOCIAL SECURITY CONTRIBUTIONSSOCIAL SERVICESSOCIAL WELFARESOCIAL WELFARE SPENDINGSTATE AUDIT OFFICESTATE BUDGETSTATE TAXESSTRUCTURAL DEFICITSSTRUCTURAL EXPENDITURESTRUCTURAL REFORMSTRUCTURAL REFORMSSUB-NATIONAL GOVERNMENTSSUPPLEMENTAL FINANCINGSUSTAINABLE FISCAL ADJUSTMENTTAX BASETAX BURDENTAX CUTSTAX POLICYTAX RATETAX RATESTAX REFORMTAX REVENUETAX REVENUESTAX STRUCTURETAX SYSTEMTOTAL EXPENDITURETOTAL SPENDINGTOTAL TAX REVENUEUNINTENDED CONSEQUENCESWorld Bank10.1596/3009