Machine generated contents note: 1 Chapter 1 The Role of Government in a Modern Market Economy -- I.The Economic Justification for Government Activity -- A.Conditions for private markets to yield an optimal allocation of goods and services -- B.Consequences of market imperfections -- II.Specific Activities for Governments -- A.Addressing natural monopolies -- B.Public goods -- C.Creating an economic framework that allows private markets to work well -- D.Managing public goods and services -- E.Externalities -- F.Merit goods -- G.Addressing distributional issues -- H.Stabilization -- I.Addressing information failures: Regulation and social insurance -- III.Summary -- 2 Chapter 2 How Fiscal Policy Affects the National Economy -- I.Fiscal Policy: An Introduction -- II.Fiscal Policy and Aggregate Demand -- A.Fiscal policy in a closed economy -- B.Fiscal policy in an open economy -- 1.Open economy with limited capital mobility and flexible exchange rate --

Contents note continued: 2.Open economy with perfect capital mobility -- 3.Impact of budget financing -- 4.Other factors affecting the impact of fiscal policy -- C.Fiscal policy in countries with limited credibility -- III.Fiscal Policy and the Supply Side -- IV.Fiscal Policy and the Balance of Payments -- V.The Interaction between Fiscal and Monetary Policy -- VI.Using Fiscal Policy for Macroeconomic Management -- A.Relative effectiveness of tax and spending policies for adjustment -- B.Using fiscal policy to promote economic growth -- VII.Limitations on Fiscal Policy -- VIII.Summary -- 3 Chapter 3 How the National Economy Affects the Fiscal Sector -- I.Business Cycles and the Government Budget -- II.How the Stage of Economic Development and Other Factors Affect Fiscal Policy -- III.Is Fiscal Policy Pro- or Counter-Cyclical? -- A.Industrial countries -- B.Developing and emerging market countries -- IV.Making Policy More Counter-Cyclical -- V.Summary --

Contents note continued: 4 Chapter 4 Fiscal Accounts, Analysis, and Forecasting -- I.Coverage of the Fiscal Sector -- II.Fiscal Accounts -- A.Main elements of the fiscal accounts -- III.Fiscal Analysis: Key Indicators -- A.Traditional measures of budget balance -- 1.Conventional (cash or overall) balance -- 2.Primary balance -- 3.Operational balance -- 4.Government savings -- 5.Public sector borrowing requirement -- B.Fiscal balances under the 2001 GFS -- C.A quick introduction to fiscal sustainability -- D.Budget financing -- 1.Foreign financing -- 2.Domestic financing -- 3.Drawing on foreign exchange reserves -- 4.Arrears -- E.Revenue analysis -- 1.The structure of the tax system -- 2.Measures of revenue performance -- F.Expenditure analysis -- IV.Fiscal Forecasting -- A.Forecasting revenues -- 1.The effective tax rate approach -- 2.The tax elasticity/buoyancy approach -- B.Forecasting expenditures -- 1.Forecasting discretionary expenditures --

Contents note continued: 2.Forecasting interest payments -- 3.Forecasting budget financing -- V.Summary -- 5 Chapter 5 Fiscal (Public Debt) Sustainability -- I.Assessing Sustainability: Basic Considerations -- A.Extensions of the basic formulas -- 1.Impact of non-debt-creating inflows -- 2.Taking account of uncertainty in forecasts -- B.Other factors to consider when assessing sustainability -- II.Analysis of Fiscal Solvency -- III.Sustainability: Going Beyond the Basics -- A."Stress testing" public debt -- B.Fiscal vulnerability -- 1.Incorrect specification of the initial fiscal position -- 2.Short-term fiscal risks -- 3.Threats to long-term fiscal sustainability -- 4.Weaknesses in the structure of revenue or expenditure, or in institutional capacity -- C.Interactions with the financial sector -- IV.Fiscal Sustainability and the Financial Crisis of 2007--09 -- V.Summary -- 6 Chapter 6 Revenue Policy -- I.Selected Data on Government Revenue -- II.Purposes of Taxation --

Contents note continued: III.Principles for an Effective Revenue System -- A.Revenue adequacy -- B.Economic efficiency -- C.Fairness -- D.Simplicity -- E.Conflicts among objectives -- F.Special issues regarding exemptions -- G.Balancing the objectives -- IV.Major Revenue Sources -- A.Personal income tax -- B.The corporate income or profit tax -- C.Payroll taxes -- D.Property taxes -- E.Taxes on general consumption -- 1.Retail sales tax -- 2.Value added tax -- F.Excise taxes -- G.Taxes on international trade -- H.Minimum taxes and presumptive levies -- I.User fees -- V.Other Tax Policy Issues -- A.Tax expenditures -- B.Taxing financial transactions -- C.Tax treaties and harmonization -- D.Implications of globalization for tax policy -- E.Tax policy and fiscal federalism -- VI.Tax Administration -- A.Basic considerations -- B.Administrative tools -- C.Trends in tax administration -- D.Dealing with tax evasion -- VII.Summary -- 7 Chapter 7 Expenditure Policy and Reform --

Contents note continued: I.Rationales for Government Expenditure: A Brief Review -- II.Expenditure Levels and Composition --- An International Comparison -- III.Main Categories of Government Expenditure -- IV.Issues Affecting Specific Categories of Expenditure -- A.Wages and salaries -- B.Purchases of other goods and services -- C.Subsidies and transfers -- 1.Consumer versus producer subsidies -- 2.General issues in subsidy design -- D.Interest expenditure -- E.Capital expenditure -- V.Special Expenditure Issues -- A.Unproductive expenditure -- B.Quasi-fiscal expenditures -- C.Mandatory vs. discretionary expenditures -- D.Contingent expenditures -- E.Public-private partnerships -- VI.Tools for Controlling Expenditure -- A.General management tools -- B."Rules of thumb" that can help control expenditure; fiscal space -- C.Short-term measures to improve expenditure control -- D.More fundamental expenditure reforms -- VII.Summary -- 8 Chapter 8 State Enterprises --

Contents note continued: I.Justifications for State Enterprises -- A.Natural monopoly -- B.Externalities require public management -- C.High risk or capital scarcity precludes private entry -- D.The service is essential but users cannot pay -- E.The public sector can manage the operation better -- II.Economic Implications of State Ownership -- A.Incentives for production and management -- B.Factors contributing to management problems -- C.Consequences for efficiency -- D.Consequences for consumers -- E.Pricing at state enterprises -- F.Financing issues -- III.Reforming State Enterprises -- A.Whether to divest or reform -- B.Enterprise restructuring: key issues -- 1.Changing operating assumptions -- 2.Organizational changes -- 3.Reforming management -- 4.Introducing competition -- 5.Risks from restructuring -- IV.Privatization -- A.Preparing for privatization -- B.Methods of privatization -- C.Fiscal impact of privatization --

Contents note continued: D.Impact of privatization on employment, the share of state enterprise activity in GDP, and revenue -- E.Effect of privatization on enterprise performance and perceived welfare -- F.Public concerns about privatization, and how governments can respond -- V.Summary -- 9 Chapter 9 Fiscal Aspects of Responding to Financial Crisis and Bank Restructuring -- I.Background: What Triggers Bank Failures and the Need for Restructuring -- II.Justification for Public Sector Response to Bank Failure and Financial Crisis -- III.Policy Options to Support Failing Banks -- A.Fiscal costs of addressing bank failure -- B.Accounting issues in bank recapitalization -- C.Illustrative cases of responding to bank crisis in Asia: Indonesia and Malaysia -- IV.Summary -- 10 Chapter 10 Fiscal Federalism and Decentralization -- A.Key issues in fiscal federalism -- I.Assigning Expenditure Responsibilities to Different Levels of Government --- General Principles --

Contents note continued: A.Application of the "benefit principle" -- B.Factors supporting more central control -- C.Examples of how expenditure functions are allocated across levels of government -- II.Assigning Revenue Sources to Different Levels of Government --- General Principles -- A.Each level of government needs dedicated revenue sources -- B.Higher levels of government can best tap more mobile revenue sources -- III.Intergovernmental Transfers in Federal Systems -- A.Different levels of government receive specified shares of certain tax revenue -- B.Revenues may be apportioned on the basis of relative population, revenue effort, or other factors -- C.Grants -- IV.Achieving Fiscal Control in Federal Systems -- A.Strategies to achieve fiscal control in federal systems -- V.Fiscal Federalism in Practice -- A.Brazil -- B.United states -- C.India -- VI.Summary -- 11 Chapter 11 Fiscal Policy for Promoting Growth and Alleviating Poverty --

Contents note continued: I.Using Fiscal Policy to Promote Growth -- A.Revenue policy -- B.Expenditure policy -- II.Using Fiscal Policy to Alleviate Poverty and Unemployment -- A.Revenue measures -- B.Expenditure measures -- III.Summary -- 12 Chapter 12 Fiscal Policy and Aging: Public Pension Programs -- I.Justifications for Public Pension Programs -- A.Market failures -- B.Other considerations -- II.Types of Public Pension Programs -- III.Advantages and Risks of Different Types of Public Pension Systems -- A.Fully-funded systems -- B.PAYG systems -- C.Population aging and fully funded systems -- D.Risks affecting all pension systems -- IV.National Pension Programs: Illustrative Examples -- A.Fully-funded systems: Malaysia and Singapore -- B.PAYG Systems: United Kingdom and United States -- V.Population Aging and the Outlook for Public Pension Programs -- VI.Reforming Public Pension Programs: A General Approach -- VII.Summary -- 13 Chapter 13 Fiscal Policy and Health Care --

Contents note continued: I.Basic Characteristics of Health Care -- A.General characteristics of health care and the market for health care services -- B.Special aspects of heath insurance -- II.The Role of Government in Health Care -- A.Asymmetric information -- B.Externalities -- C.Distributional concerns -- III.Trends in Health Expenditures -- IV.Singapore: Avoiding the Rise in Health Care Expenditures as a Percentage of GDP -- V.Strategies for Containing Fiscal Costs for Health Care -- VI.Summary -- 14 Chapter 14 Fiscal Rules -- I.Kinds of Fiscal Rules and Their Implications -- A.Types of rules -- B.Implications of different rules -- II.Effectiveness of Fiscal Rules -- III.Fiscal Rules as Part of the Framework for Fiscal Policymaking -- IV.Developing Effective Fiscal Rules -- A.General considerations -- B.Which indicator to target -- V.Recent Experience with Fiscal Rules -- VI.Summary -- 15 Chapter 15 Fiscal Reforms -- I.Goals of Fiscal Reform Programs --

Contents note continued: II.Potential Revenue Reforms -- A.Broadening the tax base, to allow lower rates -- B.Adopting new taxes with good potential for raising revenue -- C.Adjusting other taxes and non-tax revenues -- III.Potential Expenditure Reforms -- A.Current expenditures -- B.Capital expenditures -- IV.Potential Reforms for State Enterprises -- V.Potential Reforms in Tax Administration and Public Expenditure Management -- A.Tax administration -- B.Public expenditure management -- VI.Achieving Fiscal Reform -- A.Why reforms are implemented -- B.Why reforms sometimes fail -- C.Research on reform programs -- VII.Case Studies of Fiscal Reform -- A.Countries of the former Soviet Union -- B.India -- C.Pakistan -- D.Brazil -- E.Canada -- F.United States -- VIII.Conclusions.