| Code | IQ.CPA.FISP.XQ |
| Indicator Name | CPIA fiscal policy rating (1=low to 6=high) |
| Short definition | The CPIA measures the extent to which a country’s policy and institutional framework supports sustainable growth and poverty reduction, and consequently the effective use of development assistance. The outcome of the exercise yields both an overall score and scores for sixteen criteria that compose the CPIA. These criteria include: A. Economic Management (1. Monetary and Exchange Rate Policies; 2. Fiscal Policy; 3. Debt Policy and Management), B. Structural Policies (4. Trade; 5. Financial Sector; 6. Business Regulatory Environment), C. Policies for Social Inclusion/Equity (7. Gender equality; 8. Equity of public resource use; 9. Building human resources; 10. Social protection and labor; 11. Policies and institutions for environmental sustainability), D. Public Sector Management and Institutions (12. Property rights and rule-based governance; 13. Quality of budgetary and financial management; 14. Efficiency of revenue mobilization; 15. Quality of public administration; 16. Transparency, accountability, and corruption in the public sector).
This CPIA fiscal policy criterion assesses the quality of the fiscal policy in its stabilization and allocation functions. The stabilization function deals with achieving macroeconomic policy objectives in conjunction with coherent monetary and exchange rate policies—smoothing business cycle fluctuations, accommodating shocks. The allocation function is concerned with the appropriate provision of public goods. The criterion pays attention to public expenditure composition, including, for example, the provision of public infrastructure and agriculture related public goods and services that support medium-term growth. |
| Long definition | The CPIA measures the extent to which a country’s policy and institutional framework supports sustainable growth and poverty reduction, and consequently the effective use of development assistance. The outcome of the exercise yields both an overall score and scores for sixteen criteria that compose the CPIA. These criteria include: A. Economic Management (1. Monetary and Exchange Rate Policies; 2. Fiscal Policy; 3. Debt Policy and Management), B. Structural Policies (4. Trade; 5. Financial Sector; 6. Business Regulatory Environment), C. Policies for Social Inclusion/Equity (7. Gender equality; 8. Equity of public resource use; 9. Building human resources; 10. Social protection and labor; 11. Policies and institutions for environmental sustainability), D. Public Sector Management and Institutions (12. Property rights and rule-based governance; 13. Quality of budgetary and financial management; 14. Efficiency of revenue mobilization; 15. Quality of public administration; 16. Transparency, accountability, and corruption in the public sector).
This CPIA fiscal policy criterion assesses the quality of the fiscal policy in its stabilization and allocation functions. The stabilization function deals with achieving macroeconomic policy objectives in conjunction with coherent monetary and exchange rate policies—smoothing business cycle fluctuations, accommodating shocks. The allocation function is concerned with the appropriate provision of public goods. The criterion pays attention to public expenditure composition, including, for example, the provision of public infrastructure and agriculture related public goods and services that support medium-term growth. |
| Source | CPIA database, World Bank Group (WBG), uri: https://datacatalog.worldbank.org/int/search/dataset/0038988 |
| Topic | Public Sector: Policy & institutions |
| Dataset | WDI |
| Unit of measure | Score [SCORE] |
| Periodicity | Annual |
| Reference period | 2005-2024 |
| Aggregation method | Unweighted average |
| Development relevance | The CPIA measures the extent to which a country’s policy and institutional framework supports sustainable growth and poverty reduction, and consequently the effective use of development assistance. The outcome of the exercise yields both an overall score and scores for all of the sixteen criteria that compose the CPIA. Experience has taught the development community that good policies and institutions lead, over time, to favorable growth and poverty reduction outcomes, notwithstanding possible yearly fluctuations arising from internal and external factors. The CPIA ratings help determine the relative sizes of the Bank’s concessional lending (lending by the World Bank Group’s International Development Association (IDA) on terms with significant grace periods, long repayments periods, and very low-interest rates) and grants to low-income countries. IDA resources are allocated in per capita terms based on a country’s IDA country performance rating (CPR) and, to a limited extent, per capita gross national income (GNI). Use of the CPR ensures that good performers receive, in per capita terms, a higher IDA allocation — allocations are performance based. A country’s overall score is the main element of the CPR. To fully underscore this role, the overall CPIA country score is referred to as the IDA Resource Allocation Index (IRAI). |
| Limitations and exceptions | The CPIA exercise is intended to capture the quality of a country's policies and institutional arrangements, focusing on key elements that are within the country's control, rather than on outcomes (such as economic growth rates) that are influenced by events beyond the country's control. More specifically, the CPIA measures the extent to which a country's policy and institutional framework supports sustainable growth and poverty reduction and, consequently, the effective use of development assistance. |
| License URL | https://datacatalog.worldbank.org/public-licenses#cc-by |
| License Type | CC BY-4.0 |
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