Fiscal Dimensions of Sustainable Development

Abstract

The achievement of sustainable development-combining economic development, social development, and environmental protection-is a key challenge facing the international community. To this end, progress will be needed in a number of different policy areas, with the right mix of policies varying from country to country. The purpose of this pamphlet is to explore the relationships between fiscal policy-the range of the government's taxing and spending decisions-and the economic, social, and environmental aspects of sustainable development. It also addresses how the IMF seeks to promote sustainable development in its fiscal policy advice. Fiscal policy is central to the work of the IMF, whose mandate is to promote international monetary cooperation, the balanced growth of international trade, exchange stability, and orderly exchange arrangements. Fulfilling this mandate is the IMF's primary contribution to sustainable development. This pamphlet is the outcome of a collaborative effort of the staff of the Fiscal Affairs Department's Expenditure Policy Division and Environmental Team. Erwin Tiongson and Shamit Chakravarti provided statistical and computational assistance, and Suzanne Alavi, Amy Deigh, and Meike Gretemann assisted in revising the final version of the pamphlet. The authors are grateful to Teresa Ter-Minassian, Director of the Fiscal Affairs Department, for guidance and suggestions on earlier drafts. Other colleagues in the Fiscal Affairs Department, as well as in other IMF departments, also provided insightful comments on earlier drafts. The pamphlet was edited by Paul Gleason of the External Relations Department and typeset by Choon Lee of the Graphics Section of the Technology and General Services Department. The authors bear the sole responsibility for any remaining errors and omissions.

Determinants of the expenditure side of environmental federalism – panel data research on countries in Europe

“…Therefore, deepening environmental federalism through controlling the decentralization of revenues and increasing the decentralization of expenditures can play a key role in stimulating economic growth and ameliorating environmental pollution. The credibility of the government's fiscal position is critical for the enhancement of sustainable growth, in cases where public expenditures should support more efficient resource use (Gupta et al, 2002). At the same time, considering the international perspective, there is a lack of surveys that analyse factors affecting the distribution of funds for environmental protection in the budgets of local governments.…”