Incrementality and Fungibility
The fungibility (interchangeability) of money makes it difficult to determine the incrementality (the amount of change caused by an amount of input) of government initiatives using Expenditure-Based Policy Instruments.
YourDictionary (reference below) defines incrementality as the “amount of change caused by a small increment of input.”
Investopedia (reference below) defines fungibility as “a good or asset’s interchangeability with other individual goods or assets of the same type.”
Incrementality and fungibility are perennial issues for programs relying on Grants and Contributions, particularity in respect of Conditionality and Reporting Requirements. Concerns related to incrementality and fungibility press in the direction of increasing conditionality and reporting requirements, while efforts at Red Tape Reduction press in the opposite direction.
For a recent example of an initiative to reduce conditionality and reporting requirements for recipients with a demonstrated financial management capacity, see:
Globe and Mail, 27 December 2017, “Ottawa to give 10-year grants to First Nations, with less reporting on how money is spent” at https://www.theglobeandmail.com/amp/news/politics/feds-to-give-10-year-grants-to-first-nations-with-less-reporting-on-how-money-is-spent/article37438522/, accessed 28 December 2017.
Globe and Mail, 28 December 2017, “Globe editorial: This is what reconciliation can look like” at https://www.theglobeandmail.com/opinion/editorials/globe-editorial-this-is-what-reconciliation-can-look-like/article37450142/, accessed 30 December 2017.
Atlas topic, subject, and course
YourDictionary, Incrementality, at http://www.yourdictionary.com/incrementality, accessed 12 October 2017.
Investopedia, Fungibility, at http://www.investopedia.com/terms/f/fungibility.asp, accessed 12 October 2017.
Page created by: Ian Clark, last modified 27 December 2017.
Image: Guttmacher Institute, at https://www.guttmacher.org/tags/helms-amendment, accessed 28 December 2017.