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Fiscal Discipline in WAEMU: Rules, Institutions, and Markets

Ermal Hitaj and Yasin Onder

No 2013/216, IMF Working Papers from International Monetary Fund

Abstract: This paper gauges the scope for market discipline and the effectiveness of the regional surveillance framework in the West African Economic and Monetary Union (WAEMU). The paper finds that the responsiveness of sovereign bond rates to governments’ fiscal behavior in the regional financial market remains limited. In addition, the paper examines the effectiveness of fiscal rules and institutions in an environment where financial markets fall short of exerting a significant disciplining effect on governments.

Keywords: WP; financial market; monetary union; WAEMU market consist; Fiscal discipline; fiscal rules; regional surveillance sovereign risk; sovereign spreads; WAEMU; market discipline; excess reserves; interest rate spread; B. WAEMU; WAEMU treaty; WAEMU debt market; Government asset and liability management; Government debt management; Fiscal stance; Monetary unions; Global; West Africa (search for similar items in EconPapers)
Pages: 29
Date: 2013-10-23
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Handle: RePEc:imf:imfwpa:2013/216