## Experience with Budgetary Convergence in the WAEMU

_IMF Working Papers, June 1, 2002_

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**Canonical URL:** [Experience with Budgetary Convergence in the WAEMU](https://www.imf.org/en/publications/wp/issues/2016/12/30/experience-with-budgetary-convergence-in-the-waemu-15848)

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## Bibliographic details
- Authors: Paul R Masson, Ousmane Dore
- Published: June 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451853117.001

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### Summary
- Paper reviews fiscal adjustment experience 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.
- Proposes a measure of the structural deficit that corrects for movements of both the business cycle and terms of trade.
- Notes that although fiscal deficits 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.
- Concludes that meeting fiscal deficit targets in the future will be facilitated by a favorable external environment but will, in any case, require a higher revenue ratio and downward pressure on government wages as shares of GDP.

### Methodology: Structural deficit measure
- Proposes a measure of the structural deficit that corrects for movements of both the business cycle and terms of trade.
- Emphasis on adjusting fiscal deficit measures to account for:
  - business cycle movements
  - terms of trade fluctuations and shocks

### Findings on convergence and fiscal adjustment
- Fiscal deficit worsened in 1998-2001 in some WAEMU countries, partly attributable to:
  - terms of trade deterioration
  - unfavorable movements in the business cycle
- Even after correcting deficits for business cycle and terms of trade movements, fiscal convergence stalled.

### Policy implications and recommendations
- Future success in meeting fiscal deficit targets will be aided by a favorable external environment.
- Regardless of external conditions, meeting deficit targets requires:
  - a higher revenue ratio
  - downward pressure on government wages as shares of GDP

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## Content in this bundle

- **Experience with Budgetary Convergence in the WAEMU - WP/02/108**
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  - [Experience with Budgetary Convergence in the WAEMU - WP/02/108 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp02108.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/experience-with-budgetary-convergence-in-the-waemu-15848_