Front-Loaded or Back-Loaded Fiscal Adjustments: What Works in Emerging Market Economies?

Benedict Clements, Sanjeev Gupta, Emanuele Baldacci and Carlos Mulas-Granados

No 2004/157, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates the political and economic determinants of successful fiscal adjustment in 25 emerging market economies from 1980 to 2001. The results show that large and back-loaded fiscal adjustments have the highest likelihood of success. Fiscal consolidations based on expenditure cuts increase the probability of approaching and achieving fiscal sustainability but are insufficient to maintain it unless accompanied by revenue reforms. Adjustment episodes launched in countries where governments enjoy a parliamentary majority and do not face imminent elections, are found to be more successful. Fiscal consolidations undertaken under IMF-supported programs also have a higher probability of success.

Keywords: WP; Fiscal adjustment; fiscal consolidations; emerging markets; political economy; IMF support; IMF dummy; IMF arrangement; big-bang adjustment variable; IMF-standby arrangement; reports result; Fiscal consolidation; Fiscal stance; Fiscal sustainability (search for similar items in EconPapers)
Pages: 25
Date: 2004-08-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=17666 (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:2004/157

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 ().