2016年-世界发展银行全球_Public_Expenditure_Review_of_the_Palestinian_Authority___Towards_Enhanced_Public_Finance_Management_and_Improved_Fiscal_Sustainability_206页_4mb

Public Expenditure Review of the Palestinian Authority (2016)

Core Content

This report, titled Public Expenditure Review of the Palestinian Authority: Towards Enhanced Public Finance Management and Improved Fiscal Sustainability, published in September 2016, provides an in-depth analysis of the fiscal and expenditure challenges facing the Palestinian Authority (PA) in the West Bank and Gaza. It outlines key areas of concern, including the wage bill, health expenditures, pension system sustainability, intergovernmental fiscal relations, and public investment management.

Main Points

1. Macroeconomic and Fiscal Trends

• The PA has relied heavily on public sector employment and wage bill expansion to stimulate aggregate demand, especially during the early 2000s, due to the challenges of pursuing a conventional market-oriented development strategy.
• This approach was supported by the international community to address employment reduction in Israel and to build institutions for a future Palestinian state.
• However, this strategy has often led to poorly targeted and high-cost interventions, focusing on quantity over quality of public services.

2. Key Fiscal Challenges

• The PA's budget deficit has been a major issue, reaching over 10% of GDP in 2014, down from 25% in 2007.
• The deficit has been financed through budget support and domestic debt, including arrears, which now amount to nearly US$3 billion.
• The report emphasizes the need for deficit reduction, fiscal sustainability, and improved public finance management.

3. Wage Bill Analysis

• The wage bill is a significant component of public expenditure, accounting for a large share of the PA's budget.
• The wage bill as a percentage of GDP has been rising over the years, with the security sector contributing notably to this trend.
• The report highlights the need to control wage bill growth through better policy and institutional reforms, including improving hiring practices, wage growth containment, and reducing over-grading in the security sector.

4. Health Expenditures

• The health sector has seen substantial public spending, with a focus on salaries, pharmaceuticals, and medical referrals.
• The Government Health Insurance (GHI) scheme is a major source of health financing, but it faces challenges in terms of sustainability and efficiency.
• The report recommends reforms in financing, governance, service provision, and resource generation to improve the health system's performance.

5. Public Pension System

• The PA's pension system is under financial strain, with significant deficits and a growing elderly population.
• The report outlines several reform options, including transitioning to a notional defined contribution (NDC) system, which could improve fiscal sustainability.
• The potential cost savings from implementing the 2011 Pension Reform Action Plan are analyzed, showing the benefits of reform in reducing future pension expenditures.

6. Intergovernmental Fiscal Relations

• There are significant issues in the fiscal relations between the PA, municipalities, and Village Councils (VCs), including fragmented responsibilities and inefficiencies in revenue and expenditure allocation.
• The net lending issue is a critical problem, affecting the fiscal balance of local governments.
• The report recommends strengthening fiscal decentralization, addressing the net lending issue, and reducing the fragmentation of VCs to improve efficiency and resource allocation.

7. Public Investment Management (PIM)

• The PA has been engaging in public investment, but the management of these investments is lacking, with poor data collection and implementation performance.
• A comprehensive PIM system is proposed, including strategic prioritization, project development, preparation, appraisal, selection, implementation, monitoring, and evaluation.
• The report emphasizes the need for institutional reforms and legal frameworks to support effective public investment management.

Key Recommendations

• Wage Bill Control: Implement policy measures to control wage bill growth, such as improving hiring practices, wage growth containment, and reducing over-grading in the security sector.
• Health Sector Reforms: Improve the financing, governance, and efficiency of the health system, including better management of pharmaceutical spending and reducing the reliance on out-of-pocket payments.
• Pension System Reform: Transition to a notional defined contribution system to ensure long-term financial sustainability and reduce the burden on the current pay-as-you-go (PAYG) system.
• Intergovernmental Relations: Address the net lending issue, reduce the fragmentation of VCs, and strengthen fiscal decentralization to enhance efficiency and accountability.
• Public Investment Management: Establish a robust PIM system with clear legal and institutional mandates, ensuring strategic prioritization, project preparation, and effective monitoring and evaluation.

Conclusion

The report underscores the urgent need for fiscal reforms to ensure the sustainability of public expenditures in the PA. It calls for a shift from inefficient, high-cost interventions to more targeted and effective public service delivery. The recommendations focus on improving governance, enhancing institutional capacity, and aligning public spending with long-term development goals.