Suchergebnisse

The literature on fiscal adjustment focuses on the determinants of "successful" adjustment episodes that generate desirable outcomes (such as lower debt levels), but it generally ignores whether an adjustment is needed or not. This paper introduces the notion of adjustment need, which is a period of severe fiscal distress that signals a clear need for consolidation. This new concept allows the author to empirically investigate the role of political and institutional factors in determining why countries get into fiscal distress, why some are able to fiscally consolidate when required, and why others are unable to adjust despite an evident need to do so. For developing economies, strong scores for broad measures of institutional quality (e.g. rule of law indices) are found to help avoid situations of fiscal distress, but weaker scores characterize those countries that actually manage to make large adjustments. For advanced countries, the results highlight the importance of budgetary institutions: fiscal rules contribute to avoiding situations of fiscal distress, and fiscal performance management systems improve the odds of implementing adjustments. [Copyright Elsevier B.V.]

The author examines recent trends in sterilized intervention among emerging-market economies, to determine the size and extent of this policy in relation to earlier periods of heavy reserve accumulation. He then analyzes whether the domestic costs and risks of substantial and prolonged sterilization are beginning to manifest themselves. In particular, the author discusses the fiscal costs of sterilization and the recent increase in non-market-friendly sterilization methods, such as the rapid rise in reserve requirement ratios.

The International Monetary Fund (IMF) recently adopted the 2007 Decision on Bilateral Surveillance Over Members' Policies, a landmark reform that modernizes the general principles of IMF surveillance. However, support for the reform was not unanimous, and doubts have been expressed about how the Decision would be applied in practice. The authors assess the first year of the Decision's implementation in Article IV reports. Using a questionnaire based on the key aspects of the Decision, they evaluate Article IV reports published before and after the adoption of the new Decision for a set of 24 countries. The authors find that the Decision has significantly increased the overall quality of Article IV reports, with improvements noted in emerging-market, advanced, and developing countries. Bilateral surveillance is more focused on external stability and core macroeconomic policies. Exchange rate analysis, in particular, has improved significantly. The authors note, however, that the integration with multilateral surveillance remains relatively weak and that cross-country spillovers still do not receive sufficient attention. Moreover, while most reports examine domestic stability in some detail, the link between domestic stability and external stability is not adequately analyzed. On the issue of the evenhanded application of the Decision, the authors conclude that implementation has been broadly similar across country income groups, although differences remain for specific aspects of the Decision.

The International Monetary Fund (IMF, or the Fund) has undergone a number of significant policy changes and reforms in the wake of the global financial crisis. Most notably, in December 2015, the United States approved long-delayed legislation to increase the representation of developing countries in the Fund's governance structure. The vital progress on quota shares has finally allowed for a resumption of wider and increasingly critical discussion of the strategic role of the IMF in the post-crisis world. This paper aims to relaunch the debate by assessing the recent reforms and changes, identifying areas where progress is still needed and proposing solutions. Our findings suggest that, while much has been accomplished by the Fund's management and staff since the global crisis, there is still a pressing need for member countries to push for further reforms if the IMF is to remain a relevant player in the rapidly evolving global economic and financial system. Emerging-market economies remain under-represented at the Fund and continue to perceive the IMF as biased against them, undermining the influence of its advice, despite the increase in their quota share and changes to improve the quality, efficiency and even-handedness of the IMF's surveillance and lending. In advanced economies, where the Fund has traditionally had little traction on national policies, the institution faces the challenge of managing and communicating its independence in programs involving large shareholders. We propose reforms aimed at improving country representation, granting the IMF real operational independence and enhancing its catalytic role.

In this paper, we present a vision for IMF surveillance that seeks to produce a more accountable, transparent, and independent surveillance process. First, to make surveillance more focused, the IMF's assessment should be principles-based; that is, the Fund should assess the overall coherence of exchange rate, monetary, fiscal and financial policies, with a view to analyzing their effects on external stability. Second, the IMF should have a governance structure that increases incentives to support candid, transparent assessments of surveillance. In practice, this entails a different role for the Executive Board: the Board will set out the Fund's strategic framework for surveillance; the Managing Director and the staff will conduct surveillance. These reforms clarify the roles and responsibilities of the IMF and its member countries in the surveillance process. Also, our proposed reforms aim at making surveillance more even-handed and objective. We believe that this principles-based approach can bolster the credibility and legitimacy of surveillance, giving the Fund greater influence on the economic policies of members. Adapted from the source document.