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Fiscal Sustainability in Developing Asia


  • Adams, Charles

    (National University of Singapore)

  • Ferrarini, Benno

    (Asian Development Bank)

  • Park, Donghyun

    (Asian Development Bank)


The central objective of this paper is to empirically examine the issue of fiscal sustainability in developing Asia. To do so, we first diagnose the region’s public finances by analyzing the evolution of key fiscal indicators over time and across subregions. We then estimate fiscal policy response functions that measure the adjustment of the primary fiscal balance to public debt positions. Overall, our results indicate that the region’s public finances are in good shape as a result of responsible fiscal behavior. Nevertheless, failure to withdraw the region’s anticrisis fiscal stimulus in a timely manner may jeopardize fiscal sustainability, bolstering the case for strong medium-term fiscal policy frameworks.

Suggested Citation

  • Adams, Charles & Ferrarini, Benno & Park, Donghyun, 2010. "Fiscal Sustainability in Developing Asia," ADB Economics Working Paper Series 205, Asian Development Bank.
  • Handle: RePEc:ris:adbewp:0205

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    Cited by:

    1. Kaur, Balbir & Mukherjee, Atri & Ekka, Anand Prakash, 2017. "Debt Sustainability of States in India: An Assessment," MPRA Paper 81929, University Library of Munich, Germany.
    2. Shruti SHASTRI & A.K. GIRI & Geetilaxmi MOHAPATRA, 2017. "An empirical assessment of fiscal sustainability for selected South Asian economies," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 163-178, Spring.
    3. Morgan, Peter J., 2012. "The role of macroeconomic policy in rebalancing growth," Journal of Asian Economics, Elsevier, vol. 23(1), pages 13-25.
    4. Masahiro Kawai & Peter J. Morgan, 2013. "Long-term Issues for Fiscal Sustainability in Emerging Asia," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(4), pages 751-770, September.
    5. repec:eee:joecag:v:3:y:2014:i:c:p:71-83 is not listed on IDEAS
    6. Roy, Rathin, 2014. "Room at the Top: An Overview of Fiscal Space, Fiscal Policy and Inclusive Growth in Developing Asia," Working Papers 14/135, National Institute of Public Finance and Policy.
    7. repec:agr:journl:v:xxiv:y:2017:i:1(610):p:163-178 is not listed on IDEAS

    More about this item


    Fiscal sustainability; Asia; fiscal policy; fiscal balance; public debt;

    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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