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policy issues involve the protection of labour and consumer rights, the movement of
labour, currency, and capital, and the development of the physical infrastructure needed
for robust economic activity.
Many of these policy issues are discussed in other sections or chapters of this Guide. The
remainder of this subsection will elaborate potential areas of support for macroeconomic
policy development for inclusive economic growth. UNDP can coordinate forums for
dialogue on macroeconomic policy that bring together representatives of relevant
government bodies and the Central Bank, crisis-affected communities, civil society organizations,
the private sector, international financial institutions, and other development
partners. Through such forums, partners who are directly involved in the development
of macroeconomic policies can share their objectives and intentions, while representatives
from communities, civil society, and the micro, small, and medium enterprise sector
explain the situation and impact of policies on livelihoods and local economic recovery.
5.2.8 (b) Fiscal policy development
In collaboration with other development partners, especially the international financial
institutions, UNDP can provide support for a number of aspects of fiscal policy development.
The following are areas for consideration:
58 The IMF has undertaken work in the context of
the Gleneagles Scenarios, which evaluate the
macroeconomic impact of increased aid flows
that may arise from the commitments made by
the 2005 G8 Summit in Gleneagles, Scotland.
• Anchoring programmes and projects in national frameworks and budgets. An
essential first step for promoting national ownership and sustainability of livelihood
and economic recovery initiatives is to ensure that such initiatives are anchored in
national planning frameworks and budgets, including those for national economic
recovery or poverty reduction, those of related line ministries, and those pursued
jointly by the government and the United Nations, such as the UNDAF and the country
programmes.
• Public financial management. As discussed in the subsection on institutional
development above, support may be required for strengthening systems of public
financial management, including budget preparation and planning, budget execution,
procurement, accounting and fiscal reporting, debt management, and audit. In
countries with easily exploitable natural resources, this support may include support
for inclusive, participatory processes for determining expenditure priorities for natural
resource revenues and the establishment of trust funds and other management arrangements
in order to secure financial transparency and accountability.
• Expenditure ceilings. UNDP can support the development of national capacity to
identify the optimal inflationary range and can advocate for expenditure ceilings accordingly.
58 As described above, in crisis and post-crisis countries, where expenditure
commitments often dramatically exceed revenues, a trade-off can emerge between
price stability and ensuring sufficient public investment to enable recovery and forestall
social unrest. An intermediate range exists within which deficit financing can benefit
society without causing a destabilizing level of inflation.
• Revenue mobilization. UNDP and its partners can advocate for tax policies that
promote a culture of tax compliance, and they can support initiatives to strengthen
domestic revenue mobilization. In Liberia, the establishment of a large-taxpayer unit
improved the rate of compliance by large taxpayers. Some countries allow revenue
collection agencies to retain a percentage of revenues for capacity development and
logistical support if they exceed their revenue target.
• Community tax initiatives. UNDP can support community-level tax initiatives that
create employment by reinvesting tax revenue in community projects. These initiatives
Livelihoods & Economic Recovery in Crisis Situations