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The assignment of targets to instruments in developing countries cannot satisfactorily follow any simple universal rule. Which approach is appropriate is influenced by whether the economy is dominated by primary exports, by the importance of the domestic bond market and bank credit, by the extent of existing restriction in foreign exchange and financial markets, by the presence or absence of persistent high inflation, and by the existence or non‐existence of an active international market in the country's currency. Eighteen observations and maxims on stabilisation policy are tentatively drawn (pp. 64–8) from the material reviewed, and the maxims are partly summarised (pp. 69–71) in a schematic assignment, with variations, of targets to instruments.

The impact of fiscal decentralization on equalization between regions has received significant attention but there has been much less research of the impact of decentralization on equalization within regions. Theory suggests that the tradeoff between local fiscal autonomy and equalization ought to be most pronounced at the sub-region level where rural-urban disparities in the level of development are substantial. This paper is an empirical analysis of the impact of fiscal decentralization on equalization within one Russian region, Leningrad (State). We show that the regional government uses a mixture of fiscal instruments to strike a balance between giving more budgetary autonomy to local governments and eliminating the disparities among them. We also develop a method for studying this tradeoff between decentralization and equalization when only limited data are available. Finally, we argue and demonstrate that without a detailed understanding of the institutional arrangement for intergovernmental fiscal relations, one cannot evaluate the equalization or decentralization implications.

The paper includes characterizing Ramsey policy in a cash-in-advance monetary model, under flexible and sticky prices, and with different fiscal instruments.

The paper analytically and numerically characterizes the dynamic properties of Ramsey allocations. The author computes dynamics by solving second-order approximations to the Ramsey planner’s policy functions around a non-stochastic Ramsey steady state.

The Friedman rule is not mainly optimal in a cash-in-advance model with distorting taxes. The Ramsey-optimal policy with both taxes on income and consumption calls for a high inflation rate that is extremely volatile, despite the fact that changing prices is costly.

The optimality of zero nominal interest rate under flexible prices in monetary models is not mainly the case and quite depends on the preferences. The optimality of a zero inflation rate under sticky prices also very much depends on the assumed set of fiscal instruments.

The non-optimality of the Friedman rule under flexible prices is quite new. Moreover, studying the optimal fiscal and monetary policy in a New Keynesian model with a rich set of fiscal instruments is also quite original.

This paper analyses the general equilibrium and disequilibrium effects of fiscal policy when fiscal instruments have direct impacts on both aggregate supply and demand. A model is specified which incorporates the direct impacts of expenditure and tax instruments on the behavioural function for individuals and firms and which explicitly recognises the role of public production and supply. In contrast to simple Keynesian and neoclassical models, this model involves direct supply‐side crowding out and budget composition effects that operate on both aggregate demand and supply. It also reveals the relative efficiency of various “balanced instruments” under Keynesian and neoclassical conditions.

This chapter examines the issue of policy coordination as conceived by the Eurozone institutional setting. After having briefly recalled the meaning of fiscal and monetary policy coordination in the Keynesian and present paradigm, it describes the meaning of coordination inside the Eurozone: it emerges as a marked subordination of national fiscal policies to the objective of the stability of the common currency, in term of prices and interest rates. This feature generates two main fragilities to which the entire Euro Area is exposed: the first deriving from the role assigned to financial markets and the second one linked to the presence of external imbalances. Some reflections about the need to build up common policy institutions as a mean to grant stability and growth in the Eurozone are provided.

This paper seeks to examine ways in which political opposition to market‐oriented reforms in emerging markets can be challenged.

An in‐depth study of two industrial sectors is undertaken – natural resource industries and infrastructure since both these sectors are closely related to poverty alleviation in developing countries. The paper is based on a two‐year discussion and review process the OECD organized among its member countries (mostly aid agencies that had been involved in fiscal reform in developing countries) in collaboration with the IMF, the World Bank, and experts and government representatives from China, India and South Africa between 2003 and 2005.

A series of findings related to government policy in the face of opposition to economic reforms include an emphasis on consultation, local ownership and pragmatism.

This paper offers clear guidance on government reforms in emerging markets based on specific analysis of key sectors.

The chapter contains a methodology for formalized evaluation of the public fiscal policy from the view point of its impact on the financial stability of a national economy using the example of the Russian Federation and taking into account the fiscal multipliers’ effects. The significance of this problem is predetermined by recent trends in Russia’s development, when the national economy legs twice behind the world indicators. Taking into account the importance of the Russian budget system as a mechanism for the redistribution of gross domestic product (GDP), the financial stability safeguarding has been connected with the public finance sustainability and with the federal budget revenues and expenditures equilibrium. There are used the methodology of analysis of economic systems’ dynamic factors of financial stability as well as fiscal multipliers’ effects, aiming at managing national economy’s long-term development with the ultimate purpose to maintain the GDP growth rates. Taking into account the fiscal multipliers’ values, the model comparisons of the macroeconomics and budget parameters’ dynamics prove the necessity of the budget consolidation policy in 2018–2020 provided that the budget expenditures efficiency increases. The latter has been proved by modeling dependences represented by the fiscal multipliers’ effects in terms of national financial stability.

The purpose of this paper is to describe and examine the problem of biodiversity loss and to explain its underlying causes and the possibilities of using economic instruments to conserve it.

The research in this paper was undertaken through a review of the literature and an analysis of data on the trends of various measures of biodiversity worldwide.

The loss of biodiversity is occurring worldwide at a rapid rate that has the potential to significantly undermine the prospects for sustainable development. Although the main proximate cause of biodiversity loss is land conversion, the fundamental causes are rooted in economic, institutional, and social factors and include market failures and the lack of property rights.

This paper presents arguments in support of using economic instruments to conserve biodiversity and explains the conditions under which the use of these instruments is likely to be most successful.

This paper illuminates the economic, social and institutional factors that underlie the rapid loss of biodiversity and outlines some ways in which economic instruments can be used to stem the loss of biodiversity.