Determinants of Fiscal and Current Account Balances of Western Samoa: 1982-1991

Tiru Jayaraman ()

Economic Analysis and Policy, 1994, vol. 24, issue 2, 171-188

Abstract: Annual fiscal imbalances experienced by Western Samoa, an island nation in the South Pacific, are due to growing recurring expenditures each year, which are unmatched by current revenues. External aid flows in the past, mainly in the form of grants for development expenditures, have helped the country to bridge its fiscal deficits and reduce current account imbalances, thereby contributing to exchange rate stability. In the context of decreasing external aid flows to the South Pacific region, it would be appropriate to analyze the situation and take appropriate policy measures. This paper seeks to determine the underlying forces behind the fiscal imbalances and the resultant current account deficits in the external accounts of Western Samoa. The conclusions are that a higher level of mobilization of domestic resources is required, together with greater expenditure control in the short-run and fiscal reforms in the medium-term.

Keywords: Aid; Current Account (search for similar items in EconPapers)
JEL-codes: F32 F35 H61 (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:24:y:1994:i:2:p:171-188

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