Experience with Budgetary Convergence in the WAEMU

June 1, 2002

Preview Citation

Format: Chicago

Paul R Masson, and Ousmane Dore. Experience with Budgetary Convergence in the WAEMU, (USA: International Monetary Fund, 2002) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews the experience of fiscal adjustment undertaken in the West African Economic and Monetary Union (WAEMU) countries since the entry into force of the 1994 treaty establishing the framework for a regional convergence of national fiscal policies. We propose a measure of the structural deficit that corrects for movements of both the business cycle and terms of trade. Though the fiscal deficit worsened in 1998-2001 in some countries because of terms of trade deterioration and unfavorable movements in the business cycle, convergence stalled even when corrected for these factors. Meeting fiscal deficit targets in the future will be facilitated by a favorable external environment but, in any case, will require a higher revenue ratio and downward pressure on government wages as shares of GDP.

Subject: Expenditure, Fiscal consolidation, Fiscal policy, Fiscal stance, Government debt management, International trade, Public financial management (PFM), Terms of trade

Keywords: Adjustment effort, Convergence, Deficit, Financing method, Fiscal consolidation, Fiscal policy, Fiscal stance, GDP, Government debt management, Integration, Terms of trade, Terms of trade fluctuation, Terms of trade shock, WAEMU, WAEMU convergence process, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/108
Stock No:

WPIEA1082002
ISBN:

9781451853117
ISSN:

1018-5941

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