2015年-IMF国际货币组织全球_Investment_Scaling_30页_719kb

Summary of "Investment Scaling-up and the Role of Government: the Case of Benin"

Core Content

This working paper examines the fiscal implications of scaling up public investment in Benin, taking into account government inefficiencies in spending and tax collection, as well as the impact of external shocks. The study uses a Dynamic Stochastic General Equilibrium (DSGE) model to analyze how different fiscal stabilization packages affect macroeconomic performance and welfare.

Main Viewpoints

• Public Investment and Economic Growth: Scaling up public investment increases long-run output and consumption levels, but it also raises fiscal sustainability concerns.
• Fiscal Adjustment: A fiscal adjustment package is necessary to maintain fiscal sustainability. The paper compares different fiscal adjustment strategies and their welfare implications.
• Taxation and Borrowing: Consumers benefit from a smoother fiscal adjustment, which can be achieved by a mix of higher tax rates and increased government borrowing. However, higher capital taxation is found to be more welfare-enhancing as it allows for earlier consumption.
• Government Inefficiencies: Inefficiencies in both public spending and tax collection reduce the effectiveness of public investment. The paper highlights the need for improving these areas to enhance fiscal sustainability.
• External Shocks: A decline in trade revenues, such as from Nigeria's trade liberalization, can significantly increase the fiscal burden, potentially offsetting the welfare gains from public investment.

Key Information

Infrastructure Needs in Benin

• Benin has significant infrastructure needs, particularly in transport, irrigation, water and sanitation, power, and ICT.
• Infrastructure spending needs are estimated at around 16.6% of GDP, with 10% being capital investments and the rest for operation and maintenance (O&M).
• These needs are comparable to other Sub-Saharan African countries and the ECOWAS region but slightly lower than the average for Low Income Countries (LICs).

Public Investment and Inefficiencies

• Current public investment spending in Benin is about 10.5% of GDP, with 6.3% being capital investment and the rest O&M.
• Public investment completion rates are generally low, with only 42% completed in 2012 and 23.4% for foreign-financed projects.
• The paper introduces government inefficiency in tax collection, modeled by a parameter $\phi_G$ that captures the fraction of collected taxes that actually enters the government budget.

Fiscal Adjustment Packages

• The paper considers different fiscal adjustment strategies, including consumption tax, labor tax, and capital tax, as well as borrowing.
• Consumption tax is the least welfare-enhancing, while capital tax allows for earlier consumption and thus higher welfare.
• Higher efficiency in tax collection can reduce fiscal costs and serve as a good substitute for higher tax rates.

External Shocks and Trade Regime Changes

• A liberalization of the Nigerian trade regime leads to a decline in Benin's tariff revenues, reducing government revenue by around 2% of GDP.
• This external shock significantly increases the fiscal burden, potentially erasing the welfare gains from public investment.

Model Features

• The model includes three types of agents: households (optimizers and non-optimizers), firms, and the government.
• Firms produce both traded and non-traded goods, with capital and labor inputs, and face adjustment costs.
• Households are divided into optimizers (who can smooth consumption) and non-optimizers (who consume all income immediately).
• The government faces tax inefficiencies and can borrow from domestic, external concessional, and external commercial sources.

Policy Implications

• Smooth fiscal adjustment is recommended, combining higher tax rates and government borrowing.
• Taxation of capital is preferred for welfare maximization, despite its potential negative impact on private investment.
• Improving tax collection efficiency is crucial for reducing fiscal costs.
• Fiscal packages must be robust to external shocks, as they can undermine the benefits of public investment.

Conclusion

The study concludes that while public investment can boost long-run output and consumption, it requires careful fiscal management to ensure sustainability. The best policy response involves a smooth fiscal adjustment, and capital taxation is the most welfare-enhancing approach. However, the fiscal burden from external shocks can completely negate these gains, highlighting the importance of fiscal resilience and efficient tax collection in developing economies like Benin.