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Expansionary fiscal policy is mired in controversy. Its proponents suggest that during recession, it stimulates investors’ activity and has a stabilizing effect on economic growth. However, its opponents point to the costs associated with the budget deficit and public debt handling. Increased public spending may result in an increase in the interest rates, which may, in turn, hinder private investment and weaken the multiplier effect of public spending. The following study examines how private spending and market interest rates reacted to changes in public spending in Poland. The study has shown that public spending stimulates private spending, which is consistent with the Keynesian model, but it also leads to an increase in market interest rates, which is consistent with the neoclassical model.

The difference in the GDP levels is crucial for the macroeconomic forecasting to develop adequate and supportive fiscal and monetary policies. Most mismeasurements under current geoeconomics challenges can be explained by the difficulty in predicting recessions and the overestimation of the economy’s potential capacity. The research aims to consider the GDP gap’s effectiveness for the possible forecasting of the monetary policy, particularly the central bank’s interest rate. The study uses quantitative methods, particularly VAR modeling. The VAR model is chosen as a proven useful tool for describing the dynamic behavior of economic time series and forecasting. The data sample is chosen as Eurozone, the United States, and Japan. The similarity is detected on output gaps implementation in the considered states; however, the variety in the responses to the financial crisis is revealed. This difference is due to the different sensitivity of economies on the impact of monetary instruments. In particular, the Japanese economy has a relatively low level of sensitivity to changes in monetary instruments. In terms of the reactions of central banks to the current economic crisis caused by COVID-19, then due to the global lockdown and the incredible decline in economic activity, almost all countries are in a situation of negative GDP gap according the paper’s approach. However, the measures to mitigate it will vary in different states. AcknowledgmentThe paper is done in the framework of scientific faculty research 16КF040-04 “Steady-state security assessment: a new framework for analysis” (2016–2021), Taras Shevchenko National University of Kyiv (Ukraine).

Value added tax represents an important fiscal policy instrument, mainly because of the stable source of tax revenues of state budgets. At the level of EU member states, the value-added tax is most harmonized, individual member states have always an option to implement more types of VAT rates on selected goods. In order to keep prices of foodstuffs and basic necessity products at the lowest possible level and with the highest availability for consumers, EU member states apply reduced VAT rates on these goods. The main objective of the paper is to research the impact on reduced VAT rates on foodstuffs in relation to consumers. The complexity of legislative adjustments on taxation of foodstuffs should be progressively simplified because reduced VAT rates on foodstuffs become ineffective and increase the burden on households compared to incomes of households. This paper is dedicated to the observation whether the application of the reduced VAT rate on foodstuffs affects the change in total expenditures of households. Based on the panel regression model with fixed effects on states, the standard VAT rate at the chosen significance level plays a significant factor, which affects total expenditures on foodstuffs of households and thus affects consumers. In the case of the reduced VAT rate on foodstuffs, this fact has not been confirmed.

Governments of EU Member States have been reducing statutory corporate income tax rates (“CIT”) for several years. What encourages them to take part in tax competition? The article discusses several issues which are in favor of lower CIT rates. They are selected based on their relevance. The study is performed with use of data available from applicable statistical bodies/literature and is based on literature review (especially in cases where required data is not available). It seems that the commonly raised issue of rivalry for capital in the globalizing world economy with highly mobile capital could be only one of a number of reasons for CIT rate depression. Tax competition is fueled by the various sizes of the economies of EU countries as well. The following important rationale may include the aspiration of governments to curb the local shadow economy. There are also some issues of a more theoretical nature that explain decreasing CIT rates. They include: (i) the necessity to accommodate CIT rate levels from the perspective of double taxation of dividends, (ii) the requirement to consider political responsibility of CI or (iii) the need to manage a deadweight loss. As a result of these challenges EU Member States often broaden the legal CIT base to maintain government revenues.

The stability of economies all over the world over is largely a function of inflation and interest rates. Over the past two decades, Swaziland’s economy experienced increasing inflation and interest rates with the blame leveled against the absolute Monarchy’s inability to manage the economy. In particular, the period of 2010 to 2014 was the hardest hit because of increasing poverty levels. The purpose of the study was therefore to assess the relationship between inflation and interest rates in the context of Swaziland with a view to constructing fiscal and monetary policies capable of driving an efficient economy going forward. The study employed a confirmatory and quantitative approach based on a review of secondary data over the period. The source and description of data included quarterly based data within the 2010–2014 period comprising information on interest rate, gross domestic product and inflation figures from the Central Bank of Swaziland, the national library, and the Central Statistical Department of Swaziland. A descriptive approach, using Microsoft excel, was used to analyze the data. The study findings showed that there was positive relationship between interest rates and inflation. Recommendations were that, Swaziland could craft appropriate fiscal and monetary policies towards controlling the prevailing economic challenges despite the peculiar socio-political nature where the absolute Monarchy holds executive authority and accountability.

The aim of this study is to identify the relationship between fi scal policy and sovereign credit ratings within a comparative framework for the post-2000 period. In this study, indicators affecting credit notes of three rating agencies through domestic savings, growth, infl ation, unemployment, current account balance and public revenues, public expenditures, primary defi cits, budget defi cits and public debt data for selected countries for the period between 2001 and 2016 are evaluated by using probit analysis under four scenarios. The study reveals that growth, unemployment, savings, current account defi cit and public debt have come to the forefront in the realizations and far estimates, while the main indicators in the public sector, namely the impact of expenditure, defi cit, primary balance and debt on rating decisions, are more dominant in the near estimates. These results show that the factors that are differentiating the credit rating evaluation period are the indicators of public fi nance. It seems that models used by the credit institutions are more likely to show short-term outcomes in the sense of public fi nance parameters mainly refl ecting the macroeconomic responsibility level of the ruling governments. © 2019; Universitatea Babes-Bolyai, All rights reserved.

Along with its Economic and Fiscal Policy Guidelines for the 2014-2016 period, the Government on September 26 presented 37 reform measures to reduce budget deficit which include a proposal for an increase in the intermediate VAT rate.

A government running a deficit needs to turn to financial markets to place this additional public debt. Newly issued public bonds compete for financing with bonds issued by private agents. The additional demand created by the fiscal expansion pushes up interest rates, and eventually crowds out private investment. Not all economists agree that consolidating public finances would immediately reduce pressure on interest rates, however. Despite a vast literature testing crowding out, there is actually surprisingly little robust empirical support for this hypothesis.1 Interest rates are insulated from fiscal policy under two alternative conditions. The first explanation for a zero impact of deficits on aggregate macroeconomic variables is that economic agents anticipate paying down currently high deficits with higher taxes in the future. Under Ricardian Equivalence, private saving fully offsets the effect of higher public consumption (for a given level of taxation). Few economists would consider the assumptions underlying the Ricardian Equivalence null as realistic, however. More elaborate macroeconomic models that depart from the baseline Ricardian assumption easily find real economic effects of fiscal policy. There is by now also a large body of empirical evidence that clearly refutes the Ricardian hypothesis (Blanchard and Perotti 2002).

This paper analyzes whether the expansionary fiscal policy funded by issuing debt instruments in financial markets will increase short-term interest rates. If the expansionary fiscal policy increases interest rates, which decrease private spending especially investment, crowding out occurs. This is interesting because global economic crisis has encouraged many countries to run large budget deficits to stimulate the economy. Indonesia has also run budget deficit during this crisis and even in years before. The impact of such a policy can be significant because Indonesia’s debt market is still narrow and shallow. Therefore, its capability of absorbing the government debt instruments without influencing the private sector funding is limited. This study tests whether the crowding out occurs in Indonesia using a time series econometric model inspired by Cebula and Cuellar’s model. The Cointegration Regression and Error Correction Model (ECM) are used in this study. Monthly data from April 2000 to December 2008 are used for overnight real interbank call money interest rates, real net government bond issues in trading, real narrow money supply, real rate of one-month Certificate of Bank Indonesia, growth of Gross Domestic Product, and real net international capital flows. This empirical study shows that the crowding out problem occurred in Indonesia during the period. This indicates that financing budget deficit in Indonesia by issuing debt instruments in the financial markets has a negative impact on the private sector.

It has been nearly 2 years since the UK government reformed the system of local business rates to introduce a uniform business rate (UBR), but the debate continues over the merits of the new system. The change across regions in the revenues raised by the uniform system of business rates introduced in 1990 was due to 2 distinct components: a UBR effect and a reassessment of rateable values effect. Four alternative models of locally varying business rates were analyzed. These models are distinguished by alternative assumptions about resource equalization. A return to a system similar to the pre-1990 varying rates system would unfairly burden businesses in areas of low population. An improved model would take into account the degree of business concentration within a local authority. Using a model that relates local business tax rates to expenditure per establishment rather than per capita appears to be a more appropriate way of achieving horizontal equity.

Conventional wisdom holds that fixed rates provide more fiscal discipline than do flexible rates. In this paper we show that this wisdom need not hold in a standard model in which fiscal policy is endogenously determined by a maximizing fiscal authority. The claim that fixed rates induce more discipline stresses that sustained adoption of lax fiscal policies must eventually lead to an exhaustion of reserves and thus to a politically costly collapse of the peg. Hence, under fixed rates bad behavior today leads to punishment tomorrow. Under flexible rates bad behavior has costs as well. The difference is in the intertemporal distribution of these costs: flexible rates allow the effects of unsound fiscal policies to manifest themselves immediately through movements in the exchange rate. Hence, bad behavior today leads to punishment today. If fiscal authorities are impatient, flexible rates — by forcing the costs to be paid up-front — provide more fiscal discipline and higher welfare for the representative private agent. The recent experience of sub-Saharan countries supplies evidence that matches the predictions of the model.

This paper presents estimates of average net payments to government, as a per cent of average lifetime labour earnings, for generations born in Australia since Federation (1901), based on historical data combined with several reasonable future scenarios covering fiscal policy, growth and demographic change. The results shed light on whether certain generations have been treated more favorably by the public sector than others this century. The main conclusion is that the average lifetime net tax rate will, under reasonable‘assumptions, be of the order of 37–39 per cent for all currently living generations born since the mid-1930s.

Purpose: This paper examines whether the economies of oil-exporting countries respond to oil shocks differently, depending on the country's political economy factors, such as regional economic alliance, stage of economic development, and the exchange rate regime, using a structural Vector Error Correction Model (VECM). The sample countries covered in this study include all the major twelve oil exporters: the GCC countries (Bahrain, Kuwait, Oman, Saudi Arabia, UAE, and Qatar) and the non-GCC oil exporters (Iran, Nigeria, Norway, Canada, Russia and Venezuela) for the 1970-2013 period. Design/methodology/approach: To achieve the above, this paper employs a four-variable restricted structural Vector Error Correction Model (VECM) with oil prices (exogenous) and a set of endogenous variables, including GDP, M2, and Inflation for the 1970-2013 period, with a co-integrating relationship that varies from 1 to 2. Both Johansen Cointegration Test and Granger Causality Tests have been applied. To eliminate the effects of a contemporaneous correlation of the residuals with the regressors, the errors are orthogonalized by a Choleski decomposition. Finding: The political economy characteristics of countries explain why the economies of oil exporters either with fixed or managed floating exchange rates behave differently than those economies with floating exchange rates. Money is endogenous in oil-exporting countries with fixed or managed floating exchange rates, but not in oil-exporting countries with floating exchange rates. The evidence found in this paper suggests that the fixed exchange rate regime of the GCC countries is not effective in tamping down inflationary pressures, as planned. There is a strong positive effect of oil price shocks on the foreign exchange reserves of the GCC countries, whereas the effect of oil price shocks on foreign exchange reserves has been rather non-existent for the non-GCC oil exporters with floating exchange rates. Research limitations/implications: The data span is restricted by data availability, the study could ensure for more robustness and better confidence with quarterly data, but most of the variables for countries are reported annually, except for Canada, Russia, and Norway. Originality/value: This paper separates oil exporters into two distinct categories, the GCC countries and the non-GCC oil exporters. To my knowledge, this has not been done before in the academic literature. Unlike the GCC countries, the non-GCC oil exporters do not participate in a common political alliance or an economic union. Their economies are diversified and less dependent on oil exports. This study shows that the political economy characteristics play a large role in explaining why the economies of oil exporters with either fixed or managed floating exchange rates behave differently than the oil exporters with floating exchange rates.

The Australian economy has been significantly affected by the Covid-19 virus and the associated health policy actions. This has warranted a comprehensive policy response from both fiscal and monetary policy. The monetary policy response has been directed at supporting households and businesses by keeping funding costs low and ensuring credit is available. The monetary policy actions have worked as expected by lowering the key interest rate benchmarks in the economy to historically low levels, which has been transmitted through to historically low borrowing rates for households and businesses, as well as governments.

Fiscal policy influences economic conditions through public spending and taxes, generating positive or negative impulses, both on short and long term. The present research focuses on analysing the effects of the discretionary changes in the fiscal policy in seven post-communist countries of the European Union during the period 2000–2018. The autoregressive distributed lag model (ARDL) has been applied in order to obtain the convergence rates to equilibrium with a clear analysis of the periods needed to achieve the long-run fiscal sustainability. Also, the error correction vector model (VECM), which is based on the autoregressive vector (VAR) model, has been used in the second part of the analysis focusing on the Cholesky factorization of innovations. Impulse-response functions aiming to estimate the response of government expenditures to the shock produced by three macroeconomic variables have been identified.

Road transport electrification will form a substantial part of international strategies to mitigate greenhouse gas and air pollutant emissions. Targets for electrification of the road-transport sector are often set as the number of electric vehicles to be operating within the fleet by a certain date. There is recognition that timeframes for these transitions matter, but research focuses more on total numbers and upstream power considerations. Outcomes for varied uptake rates are often absent. This analysis builds multiple future electric vehicle uptake scenarios from granular fleet and activity data, using Ireland as the case study. The analysis quantifies the degrees to which the scale of ambition, early or late penetration, and a focus on passenger cars or goods vehicles affects emission outcomes. Results show that a faster electric vehicle uptake more than doubles the cumulative GHG emissions reduction by 2030. E-van and E-truck transitions are also particularly important. Impacts on air pollution are modest due to the continued improvement of Euro-standards. Broader vehicle choice, information campaigns, infrastructure investment, and fiscal policy incentives can all accelerate the rates of fleet change at a cost. Policy must therefore choose where, when, and how much to intervene with incentives, weighing the potential for positive emission outcomes against the level and timing of investment and supports to the market.

The purpose of this paper is to examine the impacts of the real exchange rate, the government deficit and other relevant variables on aggregate output in Slovenia. Few of the previous studies have applied the AD/AS model to examine the impacts of major macroeconomic variables on aggregate output. This paper makes contributions to the literature by applying a rigorous model to examine how real GDP is affected by the real exchange rate, fiscal policy and other related variables. The exponential GARCH model is applied in empirical work. The paper finds that real depreciation of the Euro may affect Slovenia’s aggregate output positively or negatively and that more central government deficit as a percent of GDP does not affect aggregate output. In addition, Slovenia’s aggregate output is positively associated with the real stock price, the real oil price and real total labor cost or wage and is negatively influenced by the real lending rate and the expected inflation rate. Recent real depreciation of the Euro would help Slovenia’s aggregate output whereas expansionary fiscal policy would not be effective in stimulating the economy.

Introduction Tobacco control programs and policies reduce tobacco use and prevent health and economic harms. The majority of tobacco control programs and policies in the United States are implemented at local and state levels. Yet the literature on state-level initiatives reports a limited set of outcomes. To facilitate decision-making that is increasingly focused on costs, we provide estimates of a broader set of measures of the impact of tobacco control policy, including smoking prevalence, disease events, deaths, medical costs, productivity and tobacco tax revenues, using the experience of Minnesota as an example. Methods Using the HealthPartners Institute’s ModelHealth™: Tobacco MN microsimulation, we assessed the impact of the stream of tobacco control expenditures and cigarette price increases from 1998 to 2017. We simulated 1.3 million individuals representative of the Minnesota population. Results The simulation estimated that increased expenditures on tobacco control above 1997 levels prevented 38,400 cancer, cardiovascular, diabetes and respiratory disease events and 4,100 deaths over 20 years. Increased prices prevented 14,600 additional events and 1,700 additional deaths. Both the net increase in tax revenues and the reduction in medical costs were greater than the additional investments in tobacco control. Conclusion Combined, the policies address both short-term and long-term goals to reduce the harms of tobacco by helping adults who wish to quit smoking and deterring youth from starting to smoke. States can pay for initial investments in tobacco control through tax increases and recoup those investments through reduced expenditures on medical care.

International audience; In this paper, I analyze the effect of domestic sovereign bond market (BM) participation on financialdollarization using a large panel of 114 developing countries over the period 1984–2009. Building on entropybalancing, my results reveal strong evidence that domestic BM participation significantly reduces financialdollarization in domestic BM countries compared to their non-domestic BM peers. Moreover, I find that thefavorable impact of domestic BM on financial dollarization (i) is larger for inflation targeting countriescompared to non-inflation targeting countries, (ii) is apparent exclusively in a non-pegged exchange rate regime,(iii) and is larger when there are fiscal rules that constrain the discretion of fiscal policy makers. Finally, I showthat the induced drop in inflation rate and its variability, nominal exchange rate variability, and seignioragerevenue are potential transmission mechanisms through which the presence of domestic BM reduces financialdollarization in domestic BM countries.

Background Large socio-economic disparities exist in US dietary habits and cardiovascular disease (CVD) mortality. While economic incentives have demonstrated success in improving dietary choices, the quantitative impact of different dietary policies on CVD disparities is not well established. We aimed to quantify and compare the potential effects on total CVD mortality and disparities of specific dietary policies to increase fruit and vegetable (F&V) consumption and reduce sugar-sweetened beverage (SSB) consumption in the US. Methods and findings Using the US IMPACT Food Policy Model and probabilistic sensitivity analyses, we estimated and compared the reductions in CVD mortality and socio-economic disparities in the US population potentially achievable from 2015 to 2030 with specific dietary policy scenarios: (a) a national mass media campaign (MMC) aimed to increase consumption of F&Vs and reduce consumption of SSBs, (b) a national fiscal policy to tax SSBs to increase prices by 10%, (c) a national fiscal policy to subsidise F&Vs to reduce prices by 10%, and (d) a targeted policy to subsidise F&Vs to reduce prices by 30% among Supplemental Nutrition Assistance Program (SNAP) participants only. We also evaluated a combined policy approach, combining all of the above policies. Data sources included the Surveillance, Epidemiology, and End Results Program, National Vital Statistics System, National Health and Nutrition Examination Survey, and published meta-analyses. Among the individual policy scenarios, a national 10% F&V subsidy was projected to be most beneficial, potentially resulting in approximately 150,500 (95% uncertainty interval [UI] 141,400–158,500) CVD deaths prevented or postponed (DPPs) by 2030 in the US. This far exceeds the approximately 35,100 (95% UI 31,700–37,500) DPPs potentially attributable to a 30% F&V subsidy targeting SNAP participants, the approximately 25,800 (95% UI 24,300–28,500) DPPs for a 1-y MMC, or the approximately 31,000 (95% UI 26,800–35,300) DPPs for a 10% SSB tax. Neither the MMC nor the individual national economic policies would significantly reduce CVD socio-economic disparities. However, the SNAP-targeted intervention might potentially reduce CVD disparities between SNAP participants and SNAP-ineligible individuals, by approximately 8% (10 DPPs per 100,000 population). The combined policy approach might save more lives than any single policy studied (approximately 230,000 DPPs by 2030) while also significantly reducing disparities, by approximately 6% (7 DPPs per 100,000 population). Limitations include our effect estimates in the model; these estimates use interventional and prospective observational studies (not exclusively randomised controlled trials). They are thus imperfect and should be interpreted as the best available evidence. Another key limitation is that we considered only CVD outcomes; the policies we explored would undoubtedly have additional beneficial effects upon other diseases. Further, we did not model or compare the cost-effectiveness of each proposed policy. Conclusions Fiscal strategies targeting diet might substantially reduce CVD burdens. A national 10% F&V subsidy would save by far the most lives, while a 30% F&V subsidy targeting SNAP participants would most reduce socio-economic disparities. A combined policy would have the greatest overall impact on both mortality and socio-economic disparities., In a modeling study, Jonathan Pearson-Stuttard and colleagues estimate the potential impact of targeted dietary policies on cardiovascular disease burden in the US., Author summary Why was this study done? Suboptimal diet is a leading cause of cardiovascular disease, death, and health disparities. Dietary policies have the potential to reduce this burden. However, the potential benefits of policies targeting fruit, vegetable, and sugar-sweetened beverage consumption in the whole US population and among those participating in the Supplemental Nutrition Assistance Program (SNAP) have not been quantified. What did the researchers do and find? We modelled and compared the potential benefits of several dietary policies targeting fruit, vegetable, and sugar-sweetened beverage consumption. We found that a modest universal reduction in fruit and vegetable prices (10% subsidy) was most likely to reduce cardiovascular disease mortality, whilst a 30% fruit and vegetable subsidy offered to SNAP participants appeared most promising for reducing disparities in cardiovascular disease mortality. Finally, we found that a combination of all these policies potentially offered the biggest benefits in terms of reducing cardiovascular disease burden and also reducing disparities. What do these findings mean? Our findings highlight the potentially powerful effects of fiscal measures targeting diet in the US. Dietary policies could potentially reduce cardiovascular disease, death, and associated disparities. A modest subsidy of fruits and vegetables for all, accompanied by a larger subsidy for SNAP participants, might be most beneficial in terms of reducing the disease burden and disparities.

This paper reviews international practices for ‘bottom-up costing’ for medium-term expenditure frameworks. Medium-term expenditure frameworks are important because they incorporate the multi-annual nature of the fiscal policy into the budget process, mitigating its short-term bias. They also allow for the incorporation of the effects of policy decisions and provide for a comprehensive fiscal sustainability picture. However, there are significant gaps in current understanding of how costing and cost information is implemented within medium-term expenditure frameworks. The objective of this paper is to assemble information on practices used in Australia, Austria, Canada, and the Netherlands to determine program costs as part of medium-term expenditure planning, and to provide preliminary observations on the strengths and weaknesses of current arrangements. The overall findings are that current costing practices fall short of the declared objectives of medium-term expenditure frameworks. The report makes some specific observations on the status of costing practices within the surveyed jurisdictions, namely that: (i) although there is no typical medium-term expenditure frameworks, some features tend to be more compatible with a greater role for bottom-up costing; (ii) where costing practices are specified, they are generally expected to be used across the entire budget, but in practice the focus is on new or expanded programs; (iii) the capacity to distinguish existing and new programs is important in utilizing cost information; (iv) the distinction between conventional program costing and forecasting helps to explain differences in costing approaches; and (v) where they are specified, costing methodologies are recommended but not mandated.

The global financial crisis poses significant challenges to fiscal policies in Sub-Saharan African countries. Growth will weaken considerably as export prices and volumes, remittances, tourism, and capital flows decline. The fiscal effects of the crisis are likely to be large and to operate mainly via revenue losses, with commodity-related revenues particularly hard hit. Countries will need to weigh their options for fiscal policy responses. Countries with output gaps and sustainable debt and financing options have scope to implement expansionary policies, by letting automatic stabilizers work, accommodating declines in commodity-related revenues, and in some cases implementing discretionary fiscal stimulus. The focus of fiscal stimulus should be on the expenditure side, particularly infrastructure and social spending given pressing needs, as reducing tax rates may be inequitable and the scope for doing so is limited given low revenue ratios. Other countries will have to adjust, in a way that will not affect critical spending. Additional donor support would reduce the need for adjustment. In all cases, countries should give priority to expanding social safety nets as needed to cushion the impact of the crisis on the poor.

The Report on the Observance of Standards and Codes - Accounting and Auditing (ROSC A&A) program is part of a 12-module joint World Bank-IMF initiative to assist member countries to strengthen their financial systems by improving their capacity to comply with internationally recognized standards and codes. The program focuses on the institutional framework underpinning national accounting and auditing practices, and degree of conformity with international standards and good practices. The initial ROSC A&A for Rwanda was carried out in 2008 and provided a key input in designing necessary financial reporting reforms in the country. The 2015 update is a valuable tool for monitoring the effectiveness of the reform program. It assesses the degree to which the recommendations of the 2008 ROSC A&A review have been implemented, identifies issues that have emerged since the last review, and proposes a number of recommendations aimed at further strengthening the quality of corporate financial reporting and auditing which contributes to improving business climate, investors’ confidence and economic growth potential of Rwanda.

This paper offers possible explanations for three generally observed facts about fiscal policy and development: (F1) The relative size of government increases as an economy develops, (F2) The rise in government and taxation are associated with rising or constant economic growth rates, and (F3) Today's developing countries have larger government sectors than did today's developed countries at similar stages of development. The explanations for these facts are based on the structural transformation from traditional (mostly agricultural) to modern (industrial and post-industrial) production, rising public infrastructure investment, and less representative governments in many of today's developing economies.

The Report on the Observance of Standards and Codes - Accounting and Auditing (ROSC A&A) program is part of a 12-module joint World Bank-IMF initiative to assist member countries to strengthen their financial systems by improving their capacity to comply with internationally recognized standards and codes. The ROSC A&A program focuses on the institutional framework underpinning national accounting and auditing practices, and degree of conformity with international standards and good practices. This 2014 update to the Report on the Observance of Standards and Codes – Accounting and Auditing (ROSC A&A) assesses the degree to which the policy recommendations of the 2003 ROSC A&A review have been implemented, identifies issues that have emerged since the last review, and proposes a number of policy recommendations aimed at further improving the quality of corporate financial reporting and auditing which contributes to improving country’s business climate, investors’ confidence and economic growth potential of Bangladesh. The policy recommendations should form the basis for a prioritized, stakeholder-driven Country Action Plan (CAP), aimed to assist in further enhancing financial reporting processes in accordance with international standards and good practices, taking into account Bangladesh’s country specific circumstances.