102 – Revista Internacional de Presupuesto Público – ASIP

Marzo/Abril 2020

Artículos:

The Effect of Containment Measures on the COVID-19 Pandemic
Pragyan Deb, Davide Furceri, Jonathan D. Ostry and Nour Tawk

The spending power of sub-national decision makers across five policy sectors
Sean Dougherty and Leah Phillips

The Value of Official Statistics: Lessons from Intergovernmental Transfers
Benjamin Roseth, Angela Reyes and Karla Yee Amézaga

 

EDITORIAL

Since the outbreak reported in Wuhan, China, in late-December 2019, the corona virus disease has spread to all over the world. In the absence of a vaccine or effective treatments, many countries have responded by implementing several non-pharmaceutical interventions to halt the spread of the virus and limit the number of fatalities.

These involvements included improved diagnostic testing and contact tracing, isolation and quarantine for infected people, and most notably measures aimed at reducing mobility and creating social distancing. While the extent and type of containment measures introduced varies across countries, most countries have introduced a combination of school closures; workplace closures; cancellation of public events; restrictions on size of gatherings; closures of public transport; stay-at-home orders and restrictions on internal movement or international travel. Containment measures have significantly reduced the number of infections and more importantly, the number of deaths.

Beyond these necessary measures, however, an issue of great interest for public budgeting is to what extent public deficits can increase without putting fiscal sustainability at risk, given the specific current macroeconomic situation of protracted government spending, combined in many cases with relatively high government debt levels.

The article written by Pragyan Deb, Davide Furceri, Jonathan D. Ostry and Nour Tawk, titled The Effect of Containment Measures on the COVID-19 Pandemic, argues that countries have implemented several containment measures to halt the spread of the 2019 coronavirus disease, but it remains unclear the extent to which these unprecedented measures have been successful. The authors examine this question using daily data on the number of coronavirus disease cases as well as on real-time containment measures implemented by countries. Results suggest that these measures have been very effective in flattening the “pandemic curve”, but there is significant heterogeneity across countries. Effectiveness is enhanced when measures are implemented quickly, where de facto mobility is curtailed, in countries with lower temperatures and population density, as well as in countries with a larger share of the elderly in total population and stronger health systems. The authors also find that easing of containment measures has resulted in an increase in the number of cases, but the effect has been lower (in absolute value) than that from a tightening of measures.

The spending power of sub-national decision makers across five policy sectors has been written by Sean Dougherty and Leah Phillips. The authors develop new measures of spending power and performance across five key sectors of sub-national government service delivery – education, long-term care, transport services, social housing and health care. The new indicators reveal unique insights about how responsibilities are assigned across levels of government, which enable the analysis of different arrangements on outcomes. Differences in characteristics across sectors and types of countries may have important consequences for intergovernmental fiscal relations.

Benjamin Roseth, Angela Reyes and Karla Yee Amézaga are the authors of the article titled The Value of Official Statistics: Lessons from Intergovernmental Transfers. They argue that much has been written about the importance of evidence-based public policy, but very few rigorous studies have been conducted on the cost to a country of the lack of good-quality statistical information. Their paper seeks to fill this gap by taking a fresh approach: an analysis of the intergovernmental scale transfer programs whose budget allocation formulas include population criteria. Through a series of simulations in three Latin American countries (Bolivia, Ecuador, and El Salvador), the authors analyze what would have happened if more accurate population estimates had been used when al- locating transfers to subnational governments. By employing retrospective population estimations, signicant results are obtained. In El Salvador, for example, due to inaccuracies in the measurement of the municipal popula- tion, approximately US$92 million (in real 2018 dollars) were generated in bad resource allocation, that is, sent to municipalities by mistake, between 2000 and 2007. This is equivalent to 700 percent of the cost of the latest census and to more than 27 times the annual budget of the statistical of ce. Although certain deterioration in the accuracy of population estimates is to be expected, the scale of its impact highlights the need to invest in two aspects of statistics: the quality of projections to enhance accuracy, and a census every 10 years, in line with international standards.

The articles published in this issue of the International Journal of Public Budget have been selected in order to promote debates over important issues and developments taking place today worldwide within the field of budget and public finances.

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