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Financial Globalization and Fiscal Perfomance in Emerging Markets


  • David Hauner
  • Manmohan S. Kumar


In recent years financial globalization and benign global market conditions have helped emerging markets in their external financing and budgetary positions. This paper examines three related issues: (i) the importance of the impact of the benign financial environment on fiscal performance; (ii) the likely fiscal impact of a reversal in this environment; and (iii) the potential contribution of fiscal reforms to maintaining favorable market access. The results suggest that the benefits from the benign environment have been substantial and that the potential reversal of the favorable external conditions underlines the need for further fiscal reforms.

Suggested Citation

  • David Hauner & Manmohan S. Kumar, 2005. "Financial Globalization and Fiscal Perfomance in Emerging Markets," IMF Working Papers 05/212, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/212

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    References listed on IDEAS

    1. Kumar, Manmohan S & Persaud, Avinash, 2002. "Pure Contagion and Investors' Shifting Risk Appetite: Analytical Issues and Empirical Evidence," International Finance, Wiley Blackwell, vol. 5(3), pages 401-436, Winter.
    2. Edda Zoli, 2004. "Credit Rationing in Emerging Economies' Access to Global Capital Markets," IMF Working Papers 04/70, International Monetary Fund.
    3. James M. Poterba & Jürgen von Hagen, 1999. "Fiscal Institutions and Fiscal Performance," NBER Books, National Bureau of Economic Research, Inc, number pote99-1, January.
    4. David Hauner, 2006. "A Fiscal Price Tag for International Reserves," International Finance, Wiley Blackwell, vol. 9(2), pages 169-195, August.
    5. Hong G. Min, 1998. "Determinants of emerging market bond spread : do economic fundamentals matter?," Policy Research Working Paper Series 1899, The World Bank.
    6. Gianluigi Ferrucci, 2003. "Empirical determinants of emerging market economies' sovereign bond spreads," Bank of England working papers 205, Bank of England.
    7. International Monetary Fund, 2005. "Fiscal Transparency and Economic Outcomes," IMF Working Papers 05/225, International Monetary Fund.
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    Cited by:

    1. Küçük, Ugur N., 2009. "Emerging Market Local Currency Bond Market, Too Risky to Invest?," MPRA Paper 21878, University Library of Munich, Germany.
    2. Byrne, Joseph P. & Fiess, Norbert & MacDonald, Ronald, 2011. "The global dimension to fiscal sustainability," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 137-150, June.
    3. Ante Žigman & Boris Cota, 2011. "The impact of fiscal policy on government bond spreads in emerging markets," Financial Theory and Practice, Institute of Public Finance, vol. 35(4), pages 385-412.
    4. Leslie E Teo & David Cowen & Hemant Shah & Ranil M Salgado & Alessandro Zanello, 2006. "Financial Integration in Asia; Recent Developments and Next Steps," IMF Working Papers 06/196, International Monetary Fund.
    5. Yilmaz Akyüz, 2007. "Debt Sustainability in Emerging Markets: A Critical Appraisal," Working Papers 61, United Nations, Department of Economics and Social Affairs.
    6. David Hauner, 2006. "Fiscal Policy and Financial Development," IMF Working Papers 06/26, International Monetary Fund.
    7. Manmohan S. Kumar & Jirí Jonáš & David Hauner, 2007. "Policy Credibility and Sovereign Credit; The Case of New EU Member States," IMF Working Papers 07/1, International Monetary Fund.


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