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Georgia Public Expenditure Review : Strategic Issues and Reform AgendaGenerating growth and creating jobs
 within a sustainable fiscal framework is Georgia s biggest
 macroeconomic challenge. Although Georgia registered rapid
 growth of 5.7 percent a year during 2010-13, unemployment
 remains high at 15 percent. New growth companies, especially
 in tourism and other service sectors, did not generate
 enough formal or even informal employment. Fiscal policy
 played a crucial role in Georgia s recent growth performance
 with a fiscal stimulus driven post-crisis recovery which
 increased deficit and debt levels followed by fiscal
 consolidation during 2010-12 when recovery took hold. The
 weak execution of the budget in 2013 and policy uncertainty
 were largely responsible for the growth slowdown during the
 year. Tackling the growth and jobs agenda in Georgia will
 require significant investment in human and physical capital
 and the government has a large role to play here. Additional
 spending, where it is needed, should be undertaken within
 the fiscal consolidation agenda of the government, designed
 to help restore the macroeconomic buffers needed to secure
 stability and sustain confidence in the future. The change
 in government in 2012 marked a shift in fiscal policy with
 prioritization of recurrent social expenditures over capital
 spending, thereby, increasing budget rigidity. During
 2012-13, the government raised the benefit levels under the
 targeted social assistance (TSA) and pensions and introduced
 universal health care (UHC). As a result, the fiscal deficit
 is likely to increase from 2.6 percent of gross domestic
 product (GDP) in 2013 to 3.7 percent in 2014. Over the
 medium term, an aging population and the need to improve
 health outcomes and coverage of the poor in social
 assistance programs will keep social expenditures high at
 more than 9 percent of GDP. The share of capital
 expenditures will level off, meanwhile. Such an outcome will
 reduce the government s flexibility in trimming current
 expenditures in the future.
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Democratic Republic of São Tomé and Príncipe : Country Integrated Fiduciary Assessment, Volume 2. Public Expenditure ReviewThis Integrated Fiduciary Assessment is
 the first of its kind for Sao Tome and Principe. It combines
 the analysis and policy recommendations from a public
 expenditure review (PER), a country financial accountability
 assessment (CFAA), and a country procurement assessment
 review (CPAR). The goal of the report is to identify the
 major challenges facing the country in the prepetroleum era
 (the next three to five years) in public finance management
 (including public enterprises) as it attempts to implement
 its National Poverty Reduction Strategy (NPRS) with a tight
 resource envelope. This executive summary presents recent
 economic developments and fiscal sustainability analysis
 that takes into account petroleum and no-petroleum
 scenarios, with corresponding analysis on which of the
 Millennium Development Goals (MDGs) are reachable. The
 summary reports on revenue and expenditure performance since
 2000-01, issues related to the implementation of the public
 investment program (PIP) and its coordination with the NPRS,
 and the budget process, including findings from the Health
 PER, which highlights a lack of allocative efficiency. The
 summary reports on the financial fragility of state-owned
 enterprises (SOEs) and the possible fiscal consequences for
 the central budget, especially regarding the implicit
 subsidies and tax breaks to (and the hypothetical tariff
 increases of) the electricity and water company. The summary
 of reports on the status of the public finance management
 system (budget preparation, execution, control, governance,
 and human resources) and the reform process that may address
 many of the concerns it rises. Finally, the summary presents
 the findings related to the procurement process, including
 the legislative and regulatory framework, institutional
 framework and management capacity, procurement operations
 and market practices, and integrity and transparency of the system.
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Protecting Public Investment against Shocks in the West African Economic and Monetary Union : Options for Fiscal Rules and Risk SharingWest African Economic and Monetary Union arrangements have been instrumental in helping member countries maintain low inflation. However, a lesser-known characteristic of the West African Economic and Monetary Union, with possible implications for economic growth, is the high exposure to shocks and the pro-cyclicality of fiscal policy associated with these arrangements. Evidence from a panel of 80 low-income and lower middle-income countries over the period 1995-2012 suggests that, in the Union, both public investment and current public expenditure are more pro-cyclical than they are in other countries. In particular, public investment contracts more in "bad times" than it increases in "good times" in order to absorb negative shocks to the budget in the context of strict fiscal convergence criteria. The asymmetric response of public investment to shocks could thus be a reason for the relatively low levels of infrastructure in the Union. Comparisons with earlier periods suggest that public investment has become pro-cyclical since the introduction of the fiscal convergence criteria in 1994. Moreover, the shocks that affect Union member countries appear to be highly idiosyncratic and thus difficult to mitigate by the Union's common monetary policy. The pro-cyclicality of public expenditure and the high asymmetry of shocks that affect Union member countries justify exploring options for greater counter-cyclicality of rules-based fiscal frameworks and for risk-sharing.