What Sustains Fiscal Consolidations in Emerging Market Countries?

Author/Editor:

Benedict J. Clements ; Sanjeev Gupta ; Erwin H Tiongson ; Emanuele Baldacci

Publication Date:

November 1, 2003

Electronic Access:

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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 examines the factors affecting the persistence of fiscal consolidation in 25 emerging market countries during 1980-2001. It proposes a new approach for defining spells of fiscal consolidation. The results indicate that the probability of ending a fiscal adjustment is affected by the legacy of previous fiscal failures, the size of the deficit, the composition of spending, and level of total revenues. There is also some evidence that the initial debt stock, exchange rate developments, inflation, and the unemployment rate have an impact on the persistence of adjustments.

Series:

Working Paper No. 03/224

Subject:

English

Publication Date:

November 1, 2003

ISBN/ISSN:

9781451875348/1018-5941

Stock No:

WPIEA2242003

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

27

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