Empirical Evidence on the Effectiveness of IMF Fiscal and Debt Policy Interventions

Baah Aye Kusi, Kwame Owusu Asante and Gloria Dzeha

Public Budgeting & Finance, 2026, vol. 46, issue 2, 84-97

Abstract: This study investigates how fiscal balance affects government debt under IMF and non‐IMF policy arrangements in 20+ African economies from 2004 to 2020, using dynamic GMM estimation to control endogeneity. Fiscal balance reduces debt in IMF and non‐IMF contexts, with a stronger economic effect under IMF‐supported periods, especially during longer program tenures. The findings support neoclassical and institutional economics, highlighting credible governance and sustained reforms. Policymakers should strengthen domestic fiscal systems and consider long‐term fiscal engagements aligned with national development goals.

Date: 2026
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