The Times They are a-Changin’: Will (Fiscal) History Repeat Itself?

Recent political and social unrest in some emerging and developing countries may have idiosyncratic features. But they also have a common denominator: a yearning for more equality in incomes, economic self-determination, and political power. Are these developments in seemingly unrelated emerging economies the beginning of a trend? Simple—some would say simplistic!—empirical evidence suggests that this […]

Signs of Fiscal Progress: Will It Be Enough?

We’ve just updated our latest assessment of the state of government finances, debts, and deficits in advanced and emerging economies. Fiscal adjustment is continuing in the advanced economies at a speed that is broadly appropriate, and roughly what we projected three months ago. In emerging economies there’s a pause in fiscal adjustment this year and next, but this too is […]

Fiscal Adjustment: Too Much of a Good Thing?

The IMF has argued for some time that the very high public debt ratios in many advanced economies should be brought down to safer levels through a gradual and steady process. Doing either too little or too much both involve risks: not enough fiscal adjustment could lead to a loss of market confidence and a […]

Fiscal Glass Is Half Full: Some Reasons for Optimism

In the midst of jittery financial markets, and global economic doom and gloom, it’s easy to become pessimistic. Perhaps too much so; amid what seems like a steady drum beat of bad news, one can lose sight of what has been  achieved over the last couple of years. Public debt and fiscal deficits in many […]

Postcard From Sao Paulo: The Latest Global Fiscal News – and Some of It’s Actually Good

In Sao Paulo, Brazil last Friday we launched our latest assessment of the state of government finances, debts and deficits.  While many countries are slogging through a tough fiscal time, there is some good news, including in the United States  ̶  the deficit will be lower this year than previously expected.  I will also give […]

Tax Matters for Developing Countries

You hear a lot these days—not least from me—about the fiscal problems of advanced economies. But let’s not forget the fiscal problems that low-income countries face, though they are of a different kind.

For all too many low-income countries, government tax revenues are far from enough to meet the needs of their people. Some have made good progress, and this helped them weather the crisis better than many advanced economies—but there is an underlying, quiet crisis of inadequately resourced governments.

Shifting Gears: Where the Rubber Meets the Fiscal Road

Undertaking a sizable fiscal adjustment is a lot like driving up a tall mountain: it’s hard work, it can take a long time, and you don’t want to run out of fuel partway up the incline.Countries are starting the climb, cutting back government deficits and debt levels, but according to our analysis often current plans aren’t enough to get countries where they need and want to go.

How to Bake a (Cr)edible Medium-term Fiscal Pie

How can governments have their cake and eat it too? How can fiscal policy provide sufficient support to economic activity, and reassure markets that fiscal solvency is not at risk? The poor state of fiscal accounts of most advanced countries calls for austere fiscal policies, before the confidence crisis that is now hitting a few small advanced economies spreads to the larger ones. But not right now: a frontloaded adjustment—that is a tightening that is not gradual but falls disproportionately early in the adjustment phase—could destabilize the recovery.