IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v13y2001i5p571-581.html
   My bibliography  Save this article

Stabex versus IMF compensatory financing: impact on fiscal policy

Author

Listed:
  • Jean-Francois Brun

    (Maître de Conférences, CERDI and University Blaise Pascal, Clermont-Ferrand, France)

  • Gérard Chambas

    (Chargé de recherches CNRS, CERDI, University of Auvergne, Clermont-Ferrand, France)

  • Bertrand Laporte

    (Maître de Conférences, CERDI, University of Auvergne, Clermont-Ferrand, France)

Abstract

The supply of external financing to developing countries generally tends to increase in periods when export earnings are booming and thus, in periods of increasing government revenues. Conversely, Stabex and IMF Compensatory Financing transfers are primarily designed to take place in response to a fall in export earnings, and thus, in periods when government revenues are decreasing. However, these transfers occur in an unsteady way with respect to the cycle of government revenues. When occurring in periods of decreasing government revenues, only Stabex transfers are used to finance additional primary expenditures (i.e. expenditures other than interest on public debt). This effect contrasts with the effects usually reported for other instruments of external financing. In periods of increasing government revenues, Stabex and Compensatory Financing transfers have no impact on fiscal deficit. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Jean-Francois Brun & Gérard Chambas & Bertrand Laporte, 2001. "Stabex versus IMF compensatory financing: impact on fiscal policy," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(5), pages 571-581.
    • Handle: RePEc:wly:jintdv:v:13:y:2001:i:5:p:571-581
    DOI: 10.1002/jid.779
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/jid.779
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.779?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Guillaumont, Patrick & Jeanneney, Sylviane Guillaumont & Brun, Jean-Francois, 1999. "How Instability Lowers African Growth," Journal of African Economies, Centre for the Study of African Economies, vol. 8(1), pages 87-107, March.
    2. Schuknecht, Ludger, 2000. "Fiscal Policy Cycles and Public Expenditure in Developing Countries," Public Choice, Springer, vol. 102(1-2), pages 115-130, January.
    3. Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June.
    4. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    5. Alberto Alesina & Roberto Perotti, 1995. "The Political Economy of Budget Deficits," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 1-31, March.
    6. Tanzi, Vito, 1986. "Fiscal Policy Responses to Exogenous Shocks in Developing Countries," American Economic Review, American Economic Association, vol. 76(2), pages 88-91, May.
    7. A. Bhargava & L. Franzini & W. Narendranathan, 2006. "Serial Correlation and the Fixed Effects Model," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 4, pages 61-77, World Scientific Publishing Co. Pte. Ltd..
    8. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    9. Maizels, Alfred, 1987. "Commodities in crisis: An overview of the main issues," World Development, Elsevier, vol. 15(5), pages 537-549, May.
    10. Raja J. Chelliah, 1971. "Trends in Taxation in Developing Countries (Les tendances de la fiscalité dans les pays en voie de développement) (Tendencias tributarias en los países en desarrollo)," IMF Staff Papers, Palgrave Macmillan, vol. 18(2), pages 254-331, July.
    11. Hewitt, Adrian, 1983. "Stabex: An evalution of the economic impact over the first five years," World Development, Elsevier, vol. 11(12), pages 1005-1027, December.
    12. Hewitt, Adrian P., 1987. "Stabex and commodity export compensation schemes: Prospects for globalization," World Development, Elsevier, vol. 15(5), pages 617-631, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Cohen & Thibault Fally & Sébastien Villemot, 2007. "Commodity Funds: How To Fix Them?," OECD Development Centre Policy Briefs 32, OECD Publishing.
    2. Daniel Cohen & Hélène Djoufelkit-Cottenet & Pierre Jacquet & Cécile Valadier, 2008. "Lending to the Poorest Countries: A New Counter-Cyclical Debt Instrument," OECD Development Centre Working Papers 269, OECD Publishing.
    3. Aiello, Francesco Aiello, 2010. "Experiences with Traditional Compensatory Finance Scheme and Lessons from FLEX - Esperienze dei tradizionali sistemi di compensazione finanziaria e lezioni dal caso FLEX," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(1), pages 1-52.
    4. Jean-Louis COMBES & Gérard CHAMBAS & Jean-François BRUN, 2006. "Recettes publiques des pays en développement. Méthode d’évaluation," Working Papers 200611, CERDI.
    5. Francesco Aiello, 2009. "Experiences With Traditional Compensatory Finance Schemes And Lessons From Flex," Working Papers 200912, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alesina, A. & Passalacqua, A., 2016. "The Political Economy of Government Debt," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2599-2651, Elsevier.
    2. Salih BARIŞIK & Abdullah BARIS, 2017. "Impact of governance on budget deficit in developing countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(611), S), pages 111-130, Summer.
    3. Reiner Eichenberger & David Stadelmann, 2009. "Consequences of Debt Capitalization: Property Ownership and Debt/Tax Choice," CREMA Working Paper Series 2009-08, Center for Research in Economics, Management and the Arts (CREMA).
    4. Michał Mackiewicz, 2006. "Przyczyny deficytu finansów publicznych w świetle nowej ekonomii politycznej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-22.
    5. Alfredo Monte & Luca Pennacchio, 2020. "Corruption, Government Expenditure and Public Debt in OECD Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(4), pages 739-771, December.
    6. Dilla, Diana, 2017. "Staatsverschuldung und Verschuldungsmentalität [Public Debt and Debt Mentality]," MPRA Paper 79432, University Library of Munich, Germany.
    7. Sanjeev Gupta & João Tovar Jalles, 2020. "On the Political Economy Determinants of Tax Reforms: Evidence from Developing Countries," Policy Papers 199, Center for Global Development.
    8. Gilles Saint‐Paul & Davide Ticchi & Andrea Vindigni, 2021. "Engineering crises: Favoritism and strategic fiscal indiscipline," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 583-610, November.
    9. Ziogas, Thanasis & Panagiotidis, Theodore, 2021. "Revisiting the political economy of fiscal adjustments," Journal of International Money and Finance, Elsevier, vol. 111(C).
    10. Alberto F. Alesina & Roberto Perotti, 1999. "Budget Deficits and Budget Institutions," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 13-36, National Bureau of Economic Research, Inc.
    11. J.-L Combes & P. Guillaumont & S. Guillaumont Jeanneney & P. Motel Combes, 2000. "Ouverture sur l'extérieur et instabilité des taux de croissance," Revue Française d'Économie, Programme National Persée, vol. 15(1), pages 3-33.
    12. Velasco, Andres, 2000. "Debts and deficits with fragmented fiscal policymaking," Journal of Public Economics, Elsevier, vol. 76(1), pages 105-125, April.
    13. Blaise Gnimassoun & Isabelle Do Santos, 2021. "Robust structural determinants of public deficits in developing countries," Applied Economics, Taylor & Francis Journals, vol. 53(9), pages 1052-1076, February.
    14. Martinelli, Cesar & Escorza, Raul, 2007. "When are stabilizations delayed? Alesina-Drazen revisited," European Economic Review, Elsevier, vol. 51(5), pages 1223-1245, July.
    15. Jeffrey B. Nugent & Makoto Yano, 1999. "Aid, Nontraded Goods, and the Transfer Paradox in Small Countries," American Economic Review, American Economic Association, vol. 89(3), pages 431-449, June.
    16. Pierre Mandon, 2014. "Evaluating Treatment Effect and Causal Effect of Fiscal Rules on Procyclicality," Working Papers hal-01015439, HAL.
    17. Yianos Kontopoulos & Roberto Perotti, 1999. "Government Fragmentation and Fiscal Policy Outcomes: Evidence from OECD Countries," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 81-102, National Bureau of Economic Research, Inc.
    18. Pierre-Yves Hénin, 1997. "Soutenabilité des déficits et ajustements budgétaires," Revue Économique, Programme National Persée, vol. 48(3), pages 371-395.
    19. Eduardo Wiesner, 2008. "The Political Economy of Macroeconomic Policy Reform in Latin America," Books, Edward Elgar Publishing, number 12913.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:13:y:2001:i:5:p:571-581. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.