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Do IMF-Supported Programs Help Make Fiscal Adjustment More Durable?

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  • Soojin Moon
  • Ales Bulir

Abstract

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

Suggested Citation

  • Soojin Moon & Ales Bulir, 2003. "Do IMF-Supported Programs Help Make Fiscal Adjustment More Durable?," IMF Working Papers 03/38, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:03/38
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    References listed on IDEAS

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    Cited by:

    1. Guimarães, Bernardo de Vasconcellos & Ladeira, Carlos Eduardo de Almeida, 2015. "The determinants of IMF fiscal conditionalities: economics or politics?," Textos para discussão 391, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    2. David Felix, 2003. "The Past as Future? The Contribution of Financial Globalization to the Current Crisis of Neo-Liberalism as a Development Strategy," Working Papers wp69, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. Roberto Benelli, 2003. "Do IMF-Supported Programs Boost Private Capital Inflows? the Role of Program Size and Policy Adjustment," IMF Working Papers 03/231, International Monetary Fund.
    4. Ricardo Martin & Alex Segura-Ubiergo, 2005. "Social Spending in IMF-supported Programs," Public Economics 0504011, EconWPA.
    5. Benedict J. Clements & Sanjeev Gupta & Emanuele Baldacci & Carlos Mulas-Granados, 2004. "Front-Loaded or Back-Loaded Fiscal Adjustments; What Works in Emerging Market Economies?," IMF Working Papers 04/157, International Monetary Fund.
    6. Nawaz A. Hakro & Wadho Waqar Ahmed, 2006. "IMF Stabilization Programs, Policy Conduct and Macroeconomic Outcomes: A Case Study of Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 11(1), pages 35-62, Jan-Jun.
    7. Sanjeev Gupta & Emanuele Baldacci & Benedict Clements & Erwin R. Tiongson, 2005. "What sustains fiscal consolidations in emerging market countries?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 307-321.
    8. David Felix, 2003. "The Past as Future? The Contribution of Financial Globalization to the Current Crisis of Neo-Liberalism as a Development Strategy," Development and Comp Systems 0310002, EconWPA.
    9. Alex Mandilaras & Graham Bird, 2008. "Foreign exchange pressures in Latin America: does debt matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(5), pages 613-627.
    10. Lavigne, Robert, 2011. "The political and institutional determinants of fiscal adjustment: Entering and exiting fiscal distress," European Journal of Political Economy, Elsevier, vol. 27(1), pages 17-35, March.
    11. Benedict J. Clements & Sanjeev Gupta & Erwin H Tiongson & Emanuele Baldacci, 2003. "What Sustains Fiscal Consolidations in Emerging Market Countries?," IMF Working Papers 03/224, International Monetary Fund.

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