Dominican Republic - Public Expenditure Review : Reforming Institutions for a More Efficient Public Expenditure Management
The economic performance of the Dominican Republic over the past three years, has been less impressive than in the 1990s. During 2001-2002, economic growth slowed down to 3.5 percent per annum on average, due to the combination of external factors...
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| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/03/3178950/dominican-republic-public-expenditure-review-reforming-institutions-more-efficient-public-expenditure-management http://hdl.handle.net/10986/15545 |
| Summary: | The economic performance of the
Dominican Republic over the past three years, has been less
impressive than in the 1990s. During 2001-2002, economic
growth slowed down to 3.5 percent per annum on average, due
to the combination of external factors (the global economic
slowdown and high oil prices), and domestic policy
weaknesses. The government responded to the growth slowdown
with increased public spending, which led to high deficits,
largely financed by foreign borrowing. In 2003, economic
performance worsened further, due to a massive banking
crisis, epitomized by the collapse of the third largest
commercial bank, Baninter, amidst mismanagement, fraudulent
banking practices and inadequate banking supervision. With
the banking crisis, the electricity crisis and the
deterioration in market sentiment, real GDP growth fell to
negative 1.3 percent in 2003. Fiscal adjustment, with a view
to stabilizing the public debt, is central to the
authorities' macroeconomic program supported by an
International Monetary Fund - IMF Stand-By Arrangement. The
main messages of this Report can be summarized as follows:
1) the Dominican Republic will need to decisively improve
the allocation and efficiency of its public expenditures in
order to resume economic growth and poverty reduction; 2)
there is room for selective expenditure increases in the
social sectors, provided the inefficiencies that affect
public expenditure in these sectors can be eliminated; 3)
steps should also be taken to de-concentrate, and
professionalize decisions affecting budget preparation,
execution and control, introduce aspects that would better
help inform policymakers, and support better policy choices,
and improve the monitoring of public spending; and, 4)
efforts should be made to professionalize the civil service,
and accelerate the decentralization process, sequencing and
putting in place the conditions that guarantee sound public
expenditure management at the local, as well as central
levels of Government. |
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