Do IMF-Supported Programs Help Make Fiscal Adjustment More Durable?
February 1, 2003
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Summary
This paper investigates fiscal developments in 112 countries during the 1990s. It finds that, while the overall fiscal balance improved in most of them, the composition of this improvement differed. In nonprogram countries, revenues increased modestly and expenditure declined sharply, while in program countries both revenue and expenditure declined. However, in countries with programs that included structural conditions the adjustment was effected primarily through sharp expenditure compression. We did not find evidence of a statistically significant impact of IMF conditionality. Morever, fiscal improvements are strongly influenced by cyclical factors
Subject: Expenditure, Financial services, Fiscal conditionality, Fiscal consolidation, Fiscal policy, Fiscal stance, Real interest rates
Keywords: Africa, Asia and Pacific, conditionality, counterfactual policy, expenditure compression, Fiscal conditionality, Fiscal consolidation, fiscal policy, Fiscal stance, general evaluation estimator, IMF program dummy, IMF program performance variable, IMF-supported program, IMF-supported programs, program country, program stoppage, Real interest rates, Sub-Saharan Africa, WP
Pages:
45
Volume:
2003
DOI:
Issue:
038
Series:
Working Paper No. 2003/038
Stock No:
WPIEA0382003
ISBN:
9781451845716
ISSN:
1018-5941
