While in principle fiscal policy in all countries is a central component of the “long route of accountability” binding citizens and the state, in fragile states the political dynamics shaping the extent to which this “route” does in fact deliver incrementally better key services (such as security and health) to citizens—and for which citizens, in turn, give the state due credit—are highly fraught. Using five governance measures across two time periods (2005–10, 2010–15), we document the wide array of pathways by which the fiscal policy space can and does change and can lead to variants in outcomes. The absence of a clear singular empirical story connecting fiscal policy to effective outcomes suggests the limits of what can be asked of aggregate governance measures in providing context-specific policy guidance in fragile situations; such measures need to be closely accompanied by solid theory, experience and context-specific knowledge.
Woolcock, Michael, and Gary Milante. "Fiscal Policy in Fragile Situations: Flying in Fog with Limited Instrumentation." Macroeconomic Policy in Fragile States. Ed. Ralph Chami, Rafael Espinoza, and Peter Montiel. Oxford University Press, 2021, 271-296.