Fiscal Policy Coordination in the Waemu After the Devaluation

Christoph Rosenberg

No 1995/025, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the economic implications of fiscal policy coordination in the West African Economic and Monetary Union (WAEMU) in the light of the January 1994 devaluation of the CFA franc. Diverging tax, tariff, and budgetary politics are identified and it is argued that the resulting fiscal externalities have prevented the zone from reaping the full benefits of a monetary union. The paper shows that the devaluation makes it more desirable than ever to have a closer policy coordination to prevent such detrimental fiscal externalities. Recent efforts in this field are reviewed and evaluated. Finally, the paper offers some recommendations with respect to the optimal design of tax and tariff rate structures, and the choice of budgetary convergence criteria.

Keywords: WP; effective tariff rate; rate level; WAEMU partner country Togo; rate structure; CFA franc; deficit countries vis-à-vis zone country; distortionary rate differentiation; fiscal externality; zone country; VAT system; VAT rate; WAEMU imports; import VAT; WAEMU economy; tariff rate; excise rate; tariff system; Value-added tax; Tariffs; Consumption taxes; Excises; West Africa (search for similar items in EconPapers)
Pages: 34
Date: 1995-02-01
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=1089 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1995/025

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().