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A Cross-Country Database of Fiscal Space

Author

Listed:
  • M. Ayhan Kose

    () (WorldBank, Development Prospects Group; Brookings Institution; CEPR, and CAMA)

  • Sergio Kurlat

    (WorldBank, Development Prospects Group)

  • Franziska Ohnsorge

    () (WorldBank, Development Prospects Group; CAMA)

  • Naotaka Sugawara

    () (WorldBank, Development Prospects Group)

Abstract

This paper presents a comprehensive cross-country database of fiscal space, broadly defined as the availability of budgetary resources for a government to service its financial obligations. The database covers up to 200 countries over the period 1990-2016, and includes 28 indicators of fiscal space grouped into four categories: debt sustainability, balance sheet vulnerability, external and private sector debt related risks as potential causes of contingent liabilities, and market access. We illustrate potential applications of the database by analyzing developments in fiscal space across three time frames: over the past quarter century; during financial crises; and during oil price plunges. The main results are as follows. First, fiscal space had improved in many countries before the global financial crisis. In advanced economies, following severe deteriorations during the crisis, many indicators of fiscal space have virtually returned to levels in the mid-2000s. In contrast, fiscal space has shrunk in many emerging market and developing economies since the crisis. Second, financial crises tend to coincide with deterioration in multiple indicators of fiscal space, but they are often followed by reduced reliance on short-term borrowing. Finally, fiscal space narrows in energy-exporting emerging market and developing economies during oil price plunges but later expands, often because of procyclical fiscal tightening and, in some episodes, a recovery in oil prices.

Suggested Citation

  • M. Ayhan Kose & Sergio Kurlat & Franziska Ohnsorge & Naotaka Sugawara, 2017. "A Cross-Country Database of Fiscal Space," Koç University-TUSIAD Economic Research Forum Working Papers 1713, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:1713
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal policy; sovereign debt; fiscal deficit; private debt; financial crises; oil prices.;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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