What Sustains Fiscal Consolidations in Emerging Market Countries?

27 Pages Posted: 14 Feb 2006

See all articles by Sanjeev Gupta

Sanjeev Gupta

International Monetary Fund (IMF) - Fiscal Affairs Department

Emanuele Baldacci

International Monetary Fund (IMF) - Fiscal Affairs Department

Benedict Clements

International Monetary Fund (IMF) - African Department

Erwin R. Tiongson

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS); Institute for the Study of Labor (IZA); University College London - CReAM - Centre for Research and Analysis of Migration; Asian Institute of Management

Date Written: November 2003

Abstract

This paper examines the factors affecting the persistence of fiscal consolidation in 25 emerging market countries during 1980-2001. It proposes a new approach for defining spells of fiscal consolidation. The results indicate that the probability of ending a fiscal adjustment is affected by the legacy of previous fiscal failures, the size of the deficit, the composition of spending, and level of total revenues. There is also some evidence that the initial debt stock, exchange rate developments, inflation, and the unemployment rate have an impact on the persistence of adjustments.

Keywords: fiscal adjustment, fiscal consolidation, survival analysis, emerging markets

JEL Classification: C4, E6

Suggested Citation

Gupta, Sanjeev and Baldacci, Emanuele and Clements, Benedict and Tiongson, Erwin R., What Sustains Fiscal Consolidations in Emerging Market Countries? (November 2003). IMF Working Paper No. 03/224, Available at SSRN: https://ssrn.com/abstract=880917

Sanjeev Gupta (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Emanuele Baldacci

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Benedict Clements

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Erwin R. Tiongson

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati, 1260
Philippines

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
63
Abstract Views
811
rank
416,417
PlumX Metrics