Creating Fiscal Space for Poverty Reduction in Ecuador: A Fiscal Management and Public Expenditure Review

Ecuador's impressive fiscal performance of 2003 is encouraging, but fragile. Several structural bottlenecks could impede fiscal discipline and recovery, which is a pre-condition to develop a poverty reduction agenda. Tax earmarkings and exemptions and an expansive payroll and pensions bill have reduced to a minimum the available fiscal space for development needs. Reversing poverty trends is critical for the country's stability, and this can only be achieved with well-targeted, effective and eff…