Presentation is loading. Please wait.

Presentation is loading. Please wait.

Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 16 Finance and Fiscal Policy for Development.

Similar presentations


Presentation on theme: "Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 16 Finance and Fiscal Policy for Development."— Presentation transcript:

1 Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 16 Finance and Fiscal Policy for Development

2 Copyright © 2006 Pearson Addison-Wesley. All rights reserved The Role of the Financial System n Providing payment services n Matching savers and investors n Generating/distributing information n Allocating credit efficiently n Pricing, pooling, and trading risks n Increasing asset liquidity

3 Copyright © 2006 Pearson Addison-Wesley. All rights reserved The Painful Road to Macroeconomic Stability n Macro stabilization has three main objectives: –Controlling inflation –Restoring fiscal balance by reducing governmental spending and by raising government tax revenues –Eliminating the current account deficit by means of devaluation and export promotion

4 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Financial Systems and Monetary Policy n Differences between MDC and LDC financial systems n The role of central banks

5 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.1

6 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Financial Systems and Monetary Policy n Differences between MDC and LDC financial systems n The role of central banks n The emergence of development banking n The role of informal finance, group lending, and microfinance institutions for small-scale enterprise

7 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Reforming Financial Systems n Financial liberalization, real interest rates, savings, and investment

8 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Figure 16.1

9 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Reforming Third World Financial Systems n Financial liberalization, real interest rates, savings, and investment n Financial policy and the role of the state n Stock markets

10 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Fiscal Policy for Development n Macro stability and resource mobilization n Taxation: direct and indirect –Personal income and property taxes –Corporate income taxes –Indirect commodity taxes –Problems of tax administration

11 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.2

12 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.3

13 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Public Administration: the Scarcest Resource n Managerial/administrative capability is scarce because of: –A lack of training or experience –Political instability n Class, tribal, or religious conflict make public administration difficult n Bureaucracies are often overstaffed at the bottom and understaffed at the top

14 Copyright © 2006 Pearson Addison-Wesley. All rights reserved State-Owned Enterprises (SOEs) n Definition and description n Improving the performance of SOEs n Privatization: theory and experience

15 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.4

16 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Military Expenditures and Economic Development n Significance and economic impact

17 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.5

18 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.6

19 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Table 16.7

20 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Military Expenditures and Economic Development n Significance and economic impact n The end of the cold war: disarmament, conflict resolution, and human development

21 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Concepts for Review n Central bank n Currency board n Currency substitution n Development banks n Direct taxes n Financial liberalization n Financial repression n Group lending schemes n Indirect taxes n Informal finance n Macroeconomic stabilization n Monetary policy n Money supply

22 Copyright © 2006 Pearson Addison-Wesley. All rights reserved Concepts for Review (cont’d) n Organized money markets n Privatization n Rationing n Rotating savings and credit associations n State-owned enterprises n Transparency n Unorganized money markets


Download ppt "Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 16 Finance and Fiscal Policy for Development."

Similar presentations


Ads by Google