Nicaragua : Public Expenditure Review 2001-2006

Nicaragua has made impressive progress since 2001 in reducing the overall fiscal deficit. A series of internal and external shocks (hurricane Mitch, banking crisis, elections) reopened major fiscal gaps at the end of the 1990s, which threatened to destabilize the economy. Since then, fiscal management has remained prudent in spite of spending pressures, resulting in an improvement of the combined public sector balance (after grants) from a deficit of 5.4 percent of Gross Domestic Product (GDP) in 2002 to a surplus of 0.2 percent in 2006. The Public Expenditure Review (PER) has assessed Nicaragua's Public Financial Management (PFM) performance, using an international framework of reference that addresses seven critical dimensions: (i) credibility of the budget; (ii) comprehensiveness and transparency; (iii) budget planning; (iv) predictability and control in budget execution; (v) accounting, recording, and reporting; (vi) external scrutiny and audit; and (vii) donor practices that affect PFM. The assessment reveals that significant progress has been made since January 2004 in the implementation of the 2003 Country Financial Accountability Assessment (CFAA) Action Plan, but that some areas require further attention. Based on that assessment, the following measures are considered critical for scaling up ongoing efforts to reform and modernize public financial management (PFM). Nicaragua has come a long way since the beginning of this decade in bringing its overall fiscal balances under control. This puts Nicaragua in a good position for combating poverty in a sustained manner. To maintain that position, however, it will need to overcome further challenges that threaten to undermine fiscal stability in the medium term, notably a rapidly growing public wage bill and fiscal transfers to the municipalities. Looking beyond macroeconomic stability, Nicaragua also needs to pick up the pace of economic growth in order to generate greater momentum in poverty reduction. In this regard, the PER has identified various options for improving the quality of public expenditures in key areas relevant for economic growth. It also pointed out the most important measures needed to modernize public expenditure management and, thereby, facilitate the adjustments needed to improve the quality of public spending in a cost-effective manner. It is hoped that these insights prove useful to the authorities in their efforts to promote faster growth and poverty reduction in Nicaragua.

Bibliographic Details

Main Author:	World Bank
Language:	English
Published:	Washington, DC 2008-03
Subjects:	ACCOUNTABILITY, ACCOUNTABILITY FRAMEWORK, ACCOUNTING, ACCRUAL ACCOUNTING, AGGREGATE DEMAND, AGGREGATE FISCAL, ALLOCATION, ANNUAL BUDGET, ANNUAL BUDGET FORMULATION, ANNUAL RATE, ARTICLE, BENEFICIARIES, BUDGET ALLOCATION, BUDGET ALLOCATION RULES, BUDGET ALLOCATIONS, BUDGET EXECUTION, BUDGET FORMULATION PROCESS, BUDGET FRAMEWORK, BUDGET PLANNING, BUDGET SUPPORT, BUDGET SUPPORT OPERATIONS, BUDGET TRANSFERS, CAPITAL EXPENDITURES, CAPITAL INVESTMENT, CAPITAL SPENDING, CENTRAL BANK, CENTRAL GOVERNMENT, CENTRAL GOVERNMENT EMPLOYMENT, CENTRAL GOVERNMENT SPENDING, CIVIL SOCIETY ORGANIZATIONS, COST RECOVERY, DEBT, DEBT BURDEN, DEBT RELIEF, DEBT SERVICE, DEBT SUSTAINABILITY, DECENTRALIZATION, DECENTRALIZATION PROCESS, DECENTRALIZATION STRATEGY, DOMESTIC DEBT, DONOR AGENCIES, DONOR COORDINATION, ECONOMIC GROWTH, EDUCATION PROGRAM, EDUCATION SERVICES, EFFICIENCY GAINS, EFFICIENCY OF PUBLIC SPENDING, EXPENDITURE BUDGET, EXPENDITURE COMMITMENTS, EXPENDITURE CUTS, EXPENDITURE PLANNING, EXPENDITURE RESPONSIBILITIES, EXPENDITURES, EXTERNAL AUDIT, EXTERNAL DEBT, EXTERNAL SHOCKS, FINANCE MINISTRY, FINANCIAL RELATIONS, FINANCIAL STATEMENTS, FISCAL ADJUSTMENT, FISCAL ADJUSTMENTS, FISCAL BALANCE, FISCAL CAPACITY, FISCAL CONSEQUENCES, FISCAL CONSTRAINTS, FISCAL CONTROL, FISCAL DECENTRALIZATION, FISCAL DEFICIT, FISCAL DISCIPLINE, FISCAL FRAMEWORK, FISCAL IMBALANCE, FISCAL IMBALANCES, FISCAL IMPACT, FISCAL INFORMATION, FISCAL MANAGEMENT, FISCAL POLICY, FISCAL PRESSURES, FISCAL PROBLEMS, FISCAL REVENUE, FISCAL RISK, FISCAL SAVINGS, FISCAL STABILITY, FISCAL SUSTAINABILITY, FISCAL TARGET, FISCAL TRANSFERS, GOVERNMENT EXPENDITURES, GOVERNMENT REVENUES, GROSS FIXED CAPITAL FORMATION, GROWTH OF PUBLIC SPENDING, GROWTH RATE, HEALTH CARE, HEALTH CENTERS, HEALTH EXPENDITURES, HEALTH OUTCOMES, HEALTH POLICY, HEALTH SECTOR, HEALTH SERVICES, HEALTH SPENDING, HEALTH WORKERS, INDIRECT COSTS, INFLATION, INFLATION RATE, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE SECTOR, INTERNAL AUDIT, INTERNAL AUDIT CAPACITY, INTERNAL CONTROL, MACROECONOMIC ANALYSIS, MACROECONOMIC INDICATORS, MACROECONOMIC POLICIES, MACROECONOMIC STABILITY, MARGINAL COST, MARGINAL COSTS, MARKET FORCES, MEDIUM TERM EXPENDITURE, MEDIUM TERM EXPENDITURE FRAMEWORK, MULTILATERAL DONORS, MUNICIPAL GOVERNMENTS, MUNICIPAL RESPONSIBILITIES, MUNICIPALITIES, NATIONAL DEVELOPMENT, NATIONAL DEVELOPMENT PLAN, NATIONAL INCOME, NET PRESENT VALUE, PENSION LIABILITIES, PENSION REFORM, PERFORMANCE ASSESSMENT, PERFORMANCE ORIENTATION, PERSONNEL MANAGEMENT, POVERTY ASSESSMENT, POVERTY INDICATORS, POVERTY REDUCING, POVERTY REDUCTION, POVERTY REDUCTION STRATEGY, POVERTY REDUCTION SUPPORT, PRIVATE INVESTMENT, PRIVATE SAVINGS, PRIVATE SECTOR, PROCUREMENT DATA, PROGRAMS, PUBLIC CONSUMPTION, PUBLIC DEBT, PUBLIC EMPLOYMENT, PUBLIC ENTERPRISES, PUBLIC EXPENDITURE, PUBLIC EXPENDITURE MANAGEMENT, PUBLIC EXPENDITURE REVIEW, PUBLIC EXPENDITURES, PUBLIC FINANCE, PUBLIC FINANCES, PUBLIC FINANCIAL MANAGEMENT, PUBLIC FUNDS, PUBLIC HEALTH, PUBLIC INFRASTRUCTURE, PUBLIC INVESTMENT, PUBLIC PROCUREMENT, PUBLIC RESOURCES, PUBLIC REVENUES, PUBLIC SECTOR, PUBLIC SECTOR BUDGET, PUBLIC SECTOR DEFICIT, PUBLIC SECTOR EMPLOYEES, PUBLIC SECTOR EMPLOYMENT, PUBLIC SECTOR MANAGEMENT, PUBLIC SECTOR SPENDING, PUBLIC SERVICES, PUBLIC SPENDING, QUALITY OF PUBLIC SPENDING, REFORM ACTIONS, REFORM PROCESS, REGULATORY FRAMEWORK, REGULATORY SYSTEMS, RESOURCE ALLOCATION, RESOURCE MANAGEMENT, REVENUE GROWTH, REVENUE INCREASES, ROAD MAINTENANCE, SANITATION, SECTOR EXPENDITURE, SERVICE DELIVERY, SERVICE QUALITY, SOCIAL EXPENDITURES, SOCIAL INDICATORS, SOCIAL PROTECTION, SOCIAL SECURITY, STRATEGIC PLANS, STRUCTURAL REFORMS, SUSTAINABILITY ANALYSIS, TAX ADMINISTRATION, TAX COLLECTION, TAX REVENUES, TOTAL PUBLIC EXPENDITURE, TRANSPARENCY, UNCERTAINTY, WAGE POLICY,
Online Access:	http://documents.worldbank.org/curated/en/2008/03/9701111/nicaragua-public-expenditure-review-2001-2006 https://hdl.handle.net/10986/8090
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