Fiscal Discipline in WAEMU: Rules, Institutions, and Markets

ByErmal Hitaj, Yasin Kursat Onder

October 23, 2013

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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 gauges the scope for market discipline and the effectiveness of the regional surveillance framework in the West African Economic and Monetary Union (WAEMU). The paper finds that the responsiveness of sovereign bond rates to governments’ fiscal behavior in the regional financial market remains limited. In addition, the paper examines the effectiveness of fiscal rules and institutions in an environment where financial markets fall short of exerting a significant disciplining effect on governments.

Subject: Economic integration, Fiscal policy, Fiscal stance, Government asset and liability management, Government debt management, Monetary unions, Public debt, Public financial management (PFM)

Keywords: B. WAEMU, excess reserves, financial market, Fiscal discipline, fiscal rules, Fiscal stance, Global, Government asset and liability management, Government debt management, interest rate spread, market discipline, monetary union, Monetary unions, regional surveillance sovereign risk, sovereign spreads, WAEMU, WAEMU debt market, WAEMU market consist, WAEMU treaty, West Africa, WP

Pages:
29
Volume:
2013
DOI:
https://doi.org/10.5089/9781484398685.001
Issue:
216
Series:
Working Paper No. 2013/216
Stock No:
WPIEA2013216
ISBN:
9781484398685
ISSN:
1018-5941

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