1887

UN Department of Economic and Social Affairs (DESA) Working Papers

The UN Department of Economic and Social Affairs (DESA) Working Papers aim to stimulate discussion and critical comment on the broad range of economic, social and environmental issues associated with the United Nations Development Agenda.

English

Constraints to Achieving the MDGs Through Domestic Resource Mobilization

The present paper focuses on the role of domestic resource mobilization for financing poverty reduction strategies. Policy makers should be aware of important macroeconomic trade-offs associated with MDG strategies financed from tax increases or domestic borrowing. The trade-offs are largely intertemporal: can poor and middle-income countries absorb the initial financing costs in order to achieve expected gains in productivity and human development over time? This calls for a dynamic economy-wide framework to identify the importance of such trade-offs. The paper presents such a framework and illustrates its usefulness in applications for Costa Rica and Ecuador.

English

Keywords: Computable General Equilibrium Models, Welfare and Poverty, Distribution, Foreign Aid, Macroeconomic Analyses of Economic Development
JEL: C68: Mathematical and Quantitative Methods / Mathematical Methods; Programming Models; Mathematical and Simulation Modeling / Computable General Equilibrium Models; F35: International Economics / International Finance / Foreign Aid; O11: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Macroeconomic Analyses of Economic Development; I3: Health, Education, and Welfare / Welfare, Well-Being, and Poverty
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