Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania
IMF Working Papers, November 1, 2008
Source details
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- Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania
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Bibliographic details
- Authors: Teresa Ter-Minassian, Richard Hughes, Alejandro Hajdenberg
- Published: November 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871142.001
Overview
- Authors: Teresa Ter-Minassian, Richard Hughes, Alejandro Hajdenberg
- Publication date: November 1, 2008
- Type: IMF Working Paper
- Core objective: Assess the range of options for raising financing to meet Tanzania's infrastructure needs and recommend appropriate combinations of approaches.
Evidence on infrastructure, public investment, and growth
- The paper begins with a brief survey of the evidence on the relationship between infrastructure, public investment, and economic growth.
- Context: Over the past decade, developed and developing countries have used fiscal rules, budgetary reforms, tax policy and administration measures, public-private partnerships and other innovative financial instruments to raise additional finance for infrastructure investment.
Case for additional infrastructure investment in Tanzania
- The paper considers the case for additional infrastructure investment in Tanzania, situating the country’s needs within the broader international experience of financing infrastructure.
Five broad options for mobilizing additional resources (analyzed in the paper)
- (i) Direct private investment and PPPs
- Examines roles for direct private investment and public-private partnerships (PPPs) in mobilizing finance and delivering infrastructure services.
- (ii) Expenditure reprioritization and efficiency
- Considers reallocating existing public spending and improving efficiency in public investment to free resources for infrastructure.
- (iii) Domestic revenue mobilization
- Assesses measures to increase domestic revenues through tax policy and administration reforms.
- (iv) External grants and concessional financing
- Reviews the role of external grants and concessional finance in supplementing domestic resources for infrastructure.
- (v) Sovereign borrowing on domestic or international credit markets
- Analyzes the case for sovereign borrowing—both domestic and external—as a source of infrastructure finance.
Conclusions and policy recommendations
- The paper concludes with general recommendations on what combination of the above approaches might be suitable for Tanzania.
- Emphasis: Choosing an appropriate mix among private investment/PPPs, expenditure reprioritization and efficiency gains, domestic revenue mobilization, external grants/concessional financing, and sovereign borrowing.
Subjects and keywords
- Subject: Expenditure, Infrastructure, Public debt, Public investment and public-private partnerships (PPP), Public investment spending
- Keywords: country, government, private sector, proceeds, Tanzania, WP
Content in this bundle
- Box 1: Spending Reviews in the United Kingdom