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Aid Scaling Up: Do Wage Bill Ceilings Stand in the Way?

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  • Ms. Annalisa Fedelino
  • Mr. Gerd Schwartz
  • Marijn Verhoeven

Abstract

This paper assesses whether the scaling up of aid and the resulting increase in government spending that is needed to meet the Millennium Development Goals (MDGs) would be hampered by wage bill ceilings that are often part of government programs supported by the IMF's Poverty Reduction and Growth Facility (PRGF). Based on country case studies for 2003-05, the paper suggests that, in the past, wage bill ceilings have not restricted the use of available donor funds. Yet the paper offers a number of suggestions for further enhancing the flexibility of wage bill conditionality in PRGF-supported programs to respond to higher aid flows that may result in the future.

Suggested Citation

  • Ms. Annalisa Fedelino & Mr. Gerd Schwartz & Marijn Verhoeven, 2006. "Aid Scaling Up: Do Wage Bill Ceilings Stand in the Way?," IMF Working Papers 2006/106, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2006/106
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    References listed on IDEAS

    as
    1. Yongzheng Yang & Mr. Robert Powell & Mr. Sanjeev Gupta, 2005. "The Macroeconomic Challenges of Scaling Up Aid to Africa," IMF Working Papers 2005/179, International Monetary Fund.
    2. Mr. Peter S. Heller, 2005. "Pity the Finance Minister: Issues in Managing a Substantial Scaling-Up of Aid Flows," IMF Working Papers 2005/180, International Monetary Fund.
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    Cited by:

    1. Lorenzo Forni & Natalija Novta, 2016. "Public employment and compensation reform: the role of social dialogue and structural measures," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 960-979, October.
    2. Lorenzo Forni & Natalija Novta, 2014. "Public Employment and Compensation Reform During Times of Fiscal Consolidation," IMF Working Papers 2014/192, International Monetary Fund.
    3. Ortiz, Isabel, & Cummins, Matthew. & Capaldo, Jeronim. & Karunanethy, Kalaivani., 2015. "The decade of adjustment : a review of austerity trends 2010-2020 in 187 countries," ILO Working Papers 994890453402676, International Labour Organization.

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