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International Monetary Fund. Independent Evaluation Office
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IEOR; IEO; spending; program; deficit; revenue
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Abstract

Using a cross-country sample of 169 IMF-supported programs and detailed studies of 15 programs, this evaluation report examines various aspects of fiscal adjustment in IMF-supported programs. It presents evidence that does not support some critics’ view that IMF-supported programs typically adopt a one-size-fits-all approach to fiscal adjustment, nor the perception that programs always involve austerity by targeting reductions in public spending. The report also proposes a number of recommendations for IMF surveillance and program design in the future.

Appendix 1

Table A1.1.

Determinants of the Envisaged and Actual Fiscal Adjustment (T−1 to T+1) in IMF-Supported Programs

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Note: Equation estimated through ordinary least squares with White-corrected (heteroskedasticity-consistent) standard errors. *, **, and *** denote significance at the 90 percennt, 95 percent, and 99 percent confidence levels, respectively.
Table A1.2.

Determinants of the Differences Between Envisaged and Actual Fiscal Adjustment

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Notes: Equation estimated through ordinary least squares with White-corrected (heteroskedasticity-consistent) standard errors. * = significant at the 99 percent confidence level. Definition of variables ∆GBALA – ∆GBALE : Difference between actual and envisaged changes in the fiscal balance from T–1 to T+1. GrowthAT+ 1 – GrowthET+ 1: Differences between actual and envisaged real GDP growth at year T+1. GBALAT– 1 – GBALET– 1: Difference in the fiscal balance between the WEO (actual) and MONA (envisaged) databases. Transition: Dummy for transition countries.

Appendix 2: Code Book for Assessing the Need for Fiscal Adjustment

Do program documents clearly explain the source of the existing or potential balance of payments problem motivating the program?1

  • “Unsatisfactory”: The program document provides no explicit reference to any existing or impending external imbalance either from a flow or stock type that the program aims to correct or prevent.

  • “Marginally satisfactory”: The program document makes some quick reference to an existing or possible external imbalance, but does not provide any detailed discussion of the problem. The reader is therefore unclear about whether there is a balance of payments problem, what the nature of the problem is, and how the program is expected to correct it.

  • “Satisfactory”: The program document identifies, discusses, and critically analyzes the sources of the balance of payments problem the IMF-supported program is trying to correct. The document clearly explains the nature of the balance of payments problem calling for IMF involvement and the strategy that the program will follow to tackle it.

  • “Highly satisfactory”: In addition to the characteristics under “satisfactory,” the program document would clearly identify whether the external financing gap calling for IMF involvement resulted from a current or capital account deficit and whether it stemmed from the public or private sector.

In light of the above, do documents explain the country-specific mechanism by which the fiscal adjustment will help improve the balance of payments problem (or more generally the problem that called for the Fund’s involvement)?

  • “Unsatisfactory”: The program document makes no reference to the country-specific mechanism through which the envisaged fiscal adjustment will assist in solving or preventing the problems associated with the external imbalance.

  • “Marginally satisfactory”: The program documents refer to a possible link between fiscal adjustment and the external problems and imbalances mentioned above but provide virtually no discussion of how the mechanism that links the two will operate.

  • “Satisfactory”: The program document clearly describes and explains the mechanism through which the envisaged fiscal adjustment is going to contribute to solve or prevent the existing or possible balance of payments problem.

  • “Highly satisfactory”: Same as in previous category, but the program either provides a comprehensive analysis of these questions or includes a medium-term assessment of the relationship between these two variables.

Do documents explain the factors determining the pace and magnitude of the fiscal deficit adjustment, in particular its magnitude relative to the envisaged current account adjustment (e.g., fiscal adjustment as a fraction of the total adjustment)?

  • “Unsatisfactory”: Program documents do not compare the direction and size of the change in the fiscal and current account balances over the life of the program.

  • “Marginally satisfactory”: Program documents make some connection between how the magnitude of the envisaged fiscal adjustment is related to the magnitude of the envisaged current account adjustment, but provide practically no explanation or analysis of the envisaged joint evolution of these variables. Alternatively, a program document that makes no verbal connection between these two indicators but provides a table with information on the evolution of saving and investment balances of both the public and private sector has also been classified here.

  • “Satisfactory”: The program document provides a clear sense of the pace of “burden sharing” between adjustment in the private and public sector.

  • “Highly satisfactory”: Same as “satisfactory,” but the document also provides an analysis of the factors affecting the likely evolution of the current account, fiscal deficit, and private savings-investment balance, including a medium-term table with disaggregated data on savings and investment of the public and private sector.

If there are other factors influencing the envisaged fiscal deficit adjustment (other than balance of payments considerations), do documents explain clearly how they influence that adjustment?

  • “Unsatisfactory”: The program documents do not point out which macroeconomic imbalances or problems, if any, the envisaged fiscal adjustment is expected to correct, or why a reduction of the fiscal deficit under the program is the appropriate economic policy to follow.

  • “Marginally satisfactory”: The program documents give some general reasons why the fiscal adjustment might be necessary (high inflation, debt sustainability, and financing problem) but the language is vague and does not analyze the problem with sufficient detail.

  • “Satisfactory”: The program documents provide a clear explanation of the objectives of the fiscal adjustment in terms of some well-defined macroeconomic objective (free resources for the private sector, reduce inflation, and bring the public debt to a sustainable path) and the reader is given a good and unequivocal sense of why the fiscal adjustment is necessary.

  • “Highly satisfactory”: The document not only provides a good analysis of why the fiscal adjustment is necessary but also a clear explanation of why the precise magnitude of the envisaged adjustment being proposed (and not some other magnitude) is necessary.

Do documents explain the rationale for the composition of the fiscal deficit adjustment? In other words, is there a good explanation of why the adjustment has to be done through revenues or expenditures or a combination of the two?

  • “Unsatisfactory”: The program documents provide a list of expenditure and revenue measures associated with the fiscal deficit reduction, but do not explain why the burden of adjustment has to fall on revenues and expenditures; or how the specific share of adjustment revenue and expenditures has been designed.

  • “Marginally satisfactory”: The program documents refer to how the adjustment will be effected (including a sense of the envisaged revenue and expenditure changes), but do not provide a clear rationale of why this specific composition between revenue and expenditures is optimal or necessary.

  • “Satisfactory”: The program documents provide a clear sense of why the specific composition of the adjustment (between revenue and expenditures) is the appropriate one. It includes indicators of what percentage of GDP specific revenue and expenditure measures are going to yield.

  • “Highly satisfactory”: In addition to providing a good explanation of the envisaged composition of the adjustment, the documents provide some analysis of the structure of revenue and expenditure (aimed at identifying major weaknesses in the structure of public finance) and a relatively detailed analysis of how intra-revenue or intra-expenditure changes are going to contribute to the adjustment.

1

In the less likely case that the IMF-supported program did not respond to a balance of payments difficulty, the same criteria would apply but with regard to the specific reasons that motivated the program.

Appendix 3

Table A3.1.

Levels of Grants in a Sample of Sub-Saharan African Countries

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Source: Program documents.
Table A3.2.

Changes in Levels of Grants

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Source: Program documents.
Table A3.3.

Aid Flows Under IMF-Supported Programs, 1995–2001

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Sources: Program documents, and IEO staff estimates.

Appendix 4: Explanatory Variables and Methodological Issues in the Analysis of Social Spending in IMF-Supported Programs

In order to appropriately assess the impact of the IMF on social spending using a multivariate regression framework, we need to take into account at least three methodological problems: (1) missing variable bias, (2) serial correlation and nonstationarity, and (3) the endogeneity of IMF-supported programs (for a more extensive discussion of these methodological issues, including an analysis of alternative estimating techniques such as the Generalized Evaluation Estimator, see Martin and Segura-Ubiergo (forthcoming).

To avoid a missing variable bias, the following control variables were defined using data from the World Bank’s World Development Indicators and the IMF’s World Economic Outlook (see Table A4.4 of this appendix for the summary statistics, including means for the “with IMF” and “without IMF” groups). Two other control variables (health_priv and ca_y) had insignificant coefficients and were excluded from the final regressions.

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The above control variables explain some of the differences in spending between countries, but there may be residual country differences in spending not captured by them. To account for that, the empirical model was also estimated with country dummies (fixed effects), that is, which allowed for a different level of average spending for each country.

To address the problem of serial correlation and nonstationarity we used a dynamic model that clearly separates short- and medium-term effects. Although there are different models that can serve this purpose, we decided to use an Autoregressive Moving Average process (ARIMA), which seemed to fit the data rather well. A first-order process on the dependent and independent variables was enough to obtain residuals without further detectable serial correlation or unit roots. The following equation was used:

S i t = γ · L S i , t + L X i t α 0 + D X i t α 1 + β η 0 · L I M F i t + β 1 · D I M F i t + u i t

where Sit denotes social spending in country “i” and period “t”, Xit is the vector of exogenous variables defined above, and IMFit measures the presence of an IMF-supported program as proxied by the instruments defined below. L is the lag operator (i.e., LZ≡Zt−1 , for any variable Z), D is the first-difference operator (DZt≡Zt−Zt−1 ) and uit are the residuals.

An alternative and equivalent way of writing (1) is:

D S i t = D X i t α 1 + β 0 · D I M F i t + ( 1 − γ ) · ( L X i t α 2 + L I M F i t β 2 − L S i t ) + u i t

where (1−γ)·α2=α1and(1−γ)·β2=β1. In this specification, changes in the dependent variables, D Sit, can be seen as the result of two effects: contemporaneous change in the explanatory variables (with an impact determined by the coefficients α1andβ1) ; and gradual adjustment to an “equilibrium” level of spending, determined by the coefficients α2andβ2 . Transitory changes in the independent variables do not change the long-run “equilibrium” level, so that the effect decays geometrically at the rate (1−γ) after the second period.

To address the endogeneity issue, the following instruments were used to “predict” the presence of an IMF-supported program:

  • current account deficit as fraction of GDP in the previous year (as proxy of external crisis);

  • growth in the previous year (proxy of unsustainable expansion);

  • income per capita (IMF-supported programs less likely in high-income countries);

  • presence of an IMF-supported program in the previous year;

  • government balance as share of GDP in the previous year; and

  • democracy index (as in the control variables).

To explore the robustness of the result we compared the results with those obtained with alternative estimation methods and with different subsamples of countries (see Table A4.2 and Table A4.3).

Table A4.1.

ARIMA Model with Control Variables and Endogenous IMF-Supported Programs

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Note: See the text for variable definitions. An initial L indicates a lagged value and D the first difference. IMF(predicted) is the estimated value of the IMF variable with the following instruments: lagged values of IMF, growth, CA/GDP, government balance/GDP, democracy index, and GDP per capita in U.S. dollars. The actual estimated equation is IMF(predicted)=0.148+0.696⁢  IMF(-1)-0.003⁢  growth(-1)+0.001⁢ ca-y(-1)+0.001⁢ cgbal(-1)-0.043⁢ democracy-0.011.gdpusdpc(41.94***)(-2.58***)(-0.69)(0.60)(-3.26***)(-4.85***)

N=1.916

R2=0.522

Table A4.2.

Summary of Robustness Analysis

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Table A4.3.

Summary of Regression Results

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Note: IMF variable measured as proportion of the years under an IMF-supported program. The number of asterisks indicates the significance level for the test that the coefficient is different from zero: *** for 99 percent, ** for 95 percent, and * for 90 percent.

Estimate of serial correlation of the regression.

CONC = Stand-By or EFF programs; NONCONC = SAF, ESAF, or PRGF programs.

Table A4.4.

Control Variables for Social Spending

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Statistically significant differences in means are indicated by *** (99 percent confidence level) or **(95 percent).

Table A4.5.

List of Countries and Subsamples

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Note: S1 = one to five years; S2 = one to ten years; and S3 = five or more years.
1

This index is defined from Gurr’s AUTOC and DEMOC scores: democracy = 1 when DEMOC – AUTOC > 4, following Brown and Hunter (1999). See also Kaufman and Segura-Ubiergo (2001), and Segura-Ubiergo (2002).

Appendix 5: Coverage of Social Issues in IMF-Supported Programs

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Source: Program documents.

Appendix 6: Progress with Reforms in 15 Selected IMF-Supported Programs

Progress with Reform by Area and Degree of Progress and as a Percent of Programs in Which the Area of Reform Is Covered

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Source: Program documents.

Appendix 7: Illustrative Selection of Technical Assistance Inputs to Fiscal Reforms in the Lead-Up to the IMF-Supported Programs in 15 Countries

Algeria 1994 Stand-By Arrangement. A 1989 FAD mission recommended measures to modernize tax administration, including a new taxpayer identification system and master file, reorganizing the department, and developing computer systems. Follow-up in 1990 to 1993 reviewed implementation and provided advice including administrative preparations for the VAT (introduced in 1992), development of a single tax identifier, and computerization of the tax department. A 1990 mission advised on revenue sharing. Missions in 1991 and 1993 assisted in the design of social safety nets.

Bulgaria 1998 Extended Fund Facility. Missions in 1996 and 1997 focused on establishing a Large Taxpayer Unit. Other recommendations included: introduction of a unique tax identification number across tax, customs, and social security; adoption of a functionally based organizational structure; improvements to the VAT audit program and collection enforcement; and development of a tax administration modernization program and computerization strategy. A resident expert was installed to help implement the tax administration reform strategy. In 1997, a mission reviewed draft legislation on the profits tax, personal income tax, and VAT. Assistance was also provided on expenditure control, fiscal management under a currency board, and public expenditure management.

Costa Rica 1995 Stand-By Arrangement. A 1992 mission reviewed proposed tax reforms and a 1995 mission provided TA on the introduction of an Integrated Financial Management System.

Ecuador 2000 Stand-By Arrangement. TA missions reviewed policy and administration in respect of the main taxes (1996–2000) and a long-term advisor assisted with tax administration reforms. Issues raised included the lack of administrative controls and suggestions included improvements in the audit process, tax collection system, management of tax arrears, and computerization of tax returns, in addition to reform of the tax code. The latest TA placed priority on the modernization of the revenue administration and offered proposals to redesign the tax system. Public expenditure management (PEM) TA aimed to strengthen the financial management of the public sector (1993), improve the monitoring and control system of major public enterprises (1995), introduce an Integrated Financial Management System (1996), and develop the social safety net (1999).

Egypt 1996 Stand-By Arrangement. TA missions reviewed the personal income and profits taxes, arguing for further simplification of the rate structure and more aggressive action to roll back exemptions and stressing problems arising from asymmetries in the treatment of interest income (1993 and 1996); and examined investment incentives, pressing for the elimination of tax holidays (1994).

Jordan 1999 Extended Fund Facility. TA missions advised on design and implementation of the goods and services tax (GST) (1993 to 1995). Jordan also received extensive technical assistance, including procedures for budget preparation and execution, financial reporting, sales taxation, reform of the tax system, and pension reform. In 1998 FAD TA included three missions to advise on means to improve budget monitoring and execution.

Pakistan 2000 Stand-By Arrangement. TA missions covered a variety of areas, including a study of the PEM system (1997); the operation of the GST and measures to improve tax administration and increase tax compliance (1997, 1998, and 1999); a review of the income tax system and development of a strategy to improve its efficiency, potential for long-term development, and ease of administration (1999); an overhaul of the income tax law (2000); the revision of fiscal data; and measures to strengthen the fiscal reporting and accounting systems (2000). In 2000, a TA mission assisted with the preparation of the fiscal module of the Report on the Observance of Standards and Codes that was followed up with a review of progress in the strengthening of the fiscal reporting and accounting systems and assistance to the authorities in the preparation of revised fiscal data for 1993/94 to 1998/99.

Peru 1996 Extended Fund Facility. TA included long-term technical assistance in tax administration since 1991 and missions to advise on the reform of the pension system (1993); VAT and excise tax administration (1994); tax administration (1994 and 1995); expenditure management and expenditure policy design in the context of a poverty reduction program (1994). In particular, the Integrated System of Financial Administration—to provide monthly planning and monitoring of expenditure and Treasury resources—benefited from FAD TA missions in 1994 and 1996 backed up by long-term technical assistance.

Philippines 1998 Stand-By Arrangement. TA missions reviewed proposals to improve the structure of the individual and corporate income taxes and to rationalize tax incentives (1995); counseled on the tax treatment of the financial sector recommending movement away from transactions-type taxes (1997); and advised on tax administration (1998). A joint FAD–World Bank mission explored the interrelations between macroeconomic policy and environmental and resource policies (1996).

Romania 1999 Stand-By Arrangement. Peripatetic TA aimed at strengthening VAT administration (1994 and 1995) and missions provided broad policy and administration advice on income taxation (personal and corporate) and indirect taxes, advising on simplicity and the establishment of broad bases (1997) as well as comprehensive assessments of revenue administration and recommendations on reorganizing the tax administration, improving registration, payments, audits and arrears management processes and, in customs, advising on strengthening antismuggling efforts, and valuation procedures (1998).

Senegal 1998 Enhanced Structural Adjustment Facility. TA included advice on social safety net issues (1994); recommendations to strengthen tax and customs administration, including upgrading the customs computer system (GAINDE); developing a strategy for staffing and training in customs; improving collaboration between the preshipment inspection supplier and customs; implementing a tax identification number; strengthening monitoring of large taxpayers; and improving audit and collection enforcement (1996). This last measure included an assessment of the revenue impact of the new external tariff structure with suggested measures to correct the revenue shortfall stemming from the introduction of a common external tariff under the West African Economic and Monetary Union—for example, establish a Large Taxpayer Unit, simplify procedures for small businesses, develop a computer system for tax operations, reinforce customs valuation controls, implement a customs warehousing procedure for petroleum products, and improve information exchange between the tax and customs departments (1998).

Tanzania 1996 Enhanced Structural Adjustment Facility. TA missions reviewed PEM (1992); assisted in the design of a VAT (1992 and 1994); recommended measures to strengthen tax and customs administration, including improvements in arrears collection, compliance, and audit procedures and information technology systems (1994); and advised on tax reforms for the 1995/96 budget (1995). To prepare for VAT, FAD provided resident advisors for 12 months between March 1994 and July 1995. TA missions also undertook a broad review of the tax system, including investment incentives (1995), and addressed a range of tax aspects of the relationship between the mainland and Zanzibar (1996). In addition, a seminar on PEM was organized in 1995.

Ukraine 1998 Extended Fund Facility. Three long-term advisors and one short-term advisor were assigned and missions undertook a broad assessment of the personal and corporate income tax and indirect taxes, and contributed to the drafting of a tax code. The assistance entailed two distinct phases: an initial phase from 1993 to 1997 that aimed at implementing a comprehensive reform program of the tax department and a subsequent phase beginning in 1997 that focused on a more targeted range of issues, including creating large taxpayer offices, strengthening audit and arrears collection, and improving the processing of VAT refunds. Other TA focused on setting up social safety nets, improving fiscal management, increasing transparency and accountability, reducing opportunities for corruption, promoting cash operations, scaling back government activities out-side the budget and quasi-fiscal operations, and strengthening expenditure controls. The key public expenditure management element was treasury development and more specifically the introduction of a single treasury account.

Uruguay 2000 Stand-By Arrangement. TA in the areas of tax and customs administration was provided in 1996. To improve transparency of public finance, in 2000 and 2001, PEM TA missions facilitated the identification of losses incurred by the public enterprises and public banks due to governmental activities that were not visible in the fiscal accounts.

Venezuela 1996 Stand-By Arrangement. TA included a review of the VAT law and advice on its implementation (1993); guidance on the implementation of the VAT, including a tax administration expert on a six-month assignment (1993/94); recommendations on tax administration (1994 and 1996); advice on tax policy (1996); and suggestions on strengthening of non-oil revenue, including indirect and income taxes (1996). A long-term expert in tax administration was also assigned. The range of recommendations went from redesigning forms for tax returns to modernizing tax administration and redrafting codes and laws covering all taxes, internal revenues, and customs. TA also assisted with performance auditing and internal control (1996).

Appendix 8

Table A8.1.

Effectiveness of Surveillance

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Bulgaria, Egypt, and Ukraine are excluded because the Article IV could not evaluate the program which was ongoing.

Table A8.2.

Article IV Reports Reviewed in the Preprogram Period

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indicates freestanding Article IV.

Tanzania’s 10/28/94 request for two-year arrangement under ESAF (EBS/94/210) was withdrawn.

Tanzania’s 1994 Article IV dates to April 1994, before the 1991 program’s ending date of July 1994. The 1995 Article IV is therefore taken as the first after that program.

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Statement by Managing Director IMF Staff Response IEO Comments on Staff Response Summing Up of IMF Executive Board Discussion by Acting Chair

Statement by the Managing Director on the Evaluation by the Independent Evaluation Office of Fiscal Adjustment in IMF-Supported Programs

Executive Board Meeting August 29, 2003

The Independent Evaluation Office (IEO) is to be commended for its well-researched and insightful account of fiscal adjustment in IMF-supported programs. Circulation of this report within the Fund has already been helpful in disseminating the lessons for Fund practice and enhancing the learning culture for the institution.

On the whole, I welcome the recommendations in the report. I have asked staff to prepare a statement indicating how we envisage taking up the report’s recommendations in the period ahead, subject to the conclusions of the Board discussion.

I look forward to Board discussion of these papers, which will provide the opportunity to draw out their implications for the Fund’s policies and procedures.

Staff Response to the Evaluation by the Independent Evaluation Office of Fiscal Adjustment in IMF-Supported Programs

Executive Board Meeting August 29, 2003

1. The staff welcomes this report (SM/03/291), which provides valuable insights on the challenges of fiscal reforms in Fund policy advice and program design. Among many useful contributions, the paper brings careful scrutiny to concerns that the Fund’s policy advice in this area follows a “one-size-fits-all” approach that tends to result in a contraction in economic activity, and it concludes that these are not valid. The staff supports most of the recommendations put forward. This statement elaborates on some of the analytical underpinnings of the report, and discusses how its recommendations can be put in practice, building on the work already under way in the Fund.

2. While the report presents extensive statistical findings on the size and composition of fiscal adjustment, its treatment of the appropriateness of the fiscal stance and its effectiveness in achieving program goals is somewhat limited. The fact that a significant share of programs envisaged an increase in the fiscal deficit may counter criticsí arguments that the Fund always recommends tighter fiscal policy, but provides little indication of the extent to which programs were successful in achieving their goals. Moreover, beyond the “headline” overall deficit, other measures such as changes in the primary balance or in the cyclically adjusted deficit may be of importance in analyzing adjustment effort and the economic impact of fiscal policy. In a similar vein, the analysis should not be confined to central or general government: in many countries, operations of the wider public sector, including quasi-fiscal activities, entail sizable deficits and contingent liabilities that can be as important as core fiscal operations.

3. The role of financing constraints in determining the size of the fiscal adjustment receives less attention in the report than we feel would be warranted. For countries that have limited access to private capital, such constraints are often binding. Conversely, for countries with access to capital markets, debt sustainability considerations play a key role in influencing the scale and terms of financing from private creditors, and the appropriate path of the fiscal balance. These factors, which are central to determining the stance of fiscal policy, would have benefited from fuller treatment in the report. Given the often present financing constraints and debt sustainability considerations, the staff would question whether the fiscal stance could realistically have been more accommodating in many cases, and there is some basis for concern in the opposite direction.

4. The report rightly urges staff to endeavor to project realistic growth rates to correct the positive bias observed in Fund-supported programs. The sources of this bias are varied but familiar. In some instances, it may be due to the assumption that the program will be fully implemented as designed. Often the overoptimism reflects the fact that program assumptions must be agreed with the authorities, who are trying to maximize support for the program and hence project a quick return of investor confidence and a rapid pickup in growth. While a more comprehensive analysis of the demand components of growth is desirable, it is unlikely to correct the bias by itself. Moreover, the implications for fiscal policy are not always clear-cut: weaker-than-projected activity might argue for a looser fiscal stance, but in cases where financing constraints are paramount, it could dictate stronger measures to achieve the needed amount of adjustment. Similarly, in those cases in which the external objective is just met, while growth turns out weaker than projected, a significantly looser fiscal policy may not have been appropriate.

5. The report suggests there is scope for greater attention to reforms to improve tax performance and spending composition in Fund-supported programs. Measures aimed at strengthening tax administration are already part of most programs where such issues are prominent. The fundamental task of tax administration is to strengthen revenue collection, and technical assistance and measures aimed at improving organizational effectiveness address tax evasion, either directly or indirectly.1 On the expenditure side, public expenditure management (PEM) has been growing in importance: in many programs, PEM measures have played a key role, aimed at strengthening expenditure control and improving the timeliness and accuracy of fiscal information. Such reforms, backed by technical assistance, include reforms in accounting, budget classification, financial planning, and cash management. PEM, an area of joint responsibility between the Fund and the World Bank, has important implications for the implementation of fiscal adjustment envisaged in Fund-supported programs. The development of social safety nets is an area in which the World Bank has lead responsibility, while Fund-supported programs integrate the envisaged cost of safety nets into fiscal targets.

6. The report provides a valuable perspective on the time frame mismatch between the duration of programs and the time required to adopt structural reforms. Clearly, this mismatch is of varying importance for different types of reform. The collection of tax arrears—in many cases mainly a question of political will—and the elimination of tax exemptions can often generate revenues quickly. On the other hand, experience suggests that other reforms, such as more general improvements in tax administration, or civil service reform, can take many years to obtain results. The staff agrees that this reality should not discourage the inclusion of key structural reforms in Fund-supported programs even when they require a multiyear effort, provided they are critical to the macroeconomic challenges facing the country. Finally, the limited success in the implementation of these types of measures is unlikely to be largely the result of the excessive focus on short-term quantitative targets of programs as the report maintains, but rather of political resistance, especially when reforms attack entrenched vested interests.

7. Recommendation 1: Program documentation should provide a more in-depth and coherent justification for the magnitude and pace of the fiscal adjustment and how it is linked with assumptions about the recovery of private sector activity and growth. The staff supports this recommendation. At the same time, it cautions that attempting too much precision in this area could lead to spurious justifications, given the inherent difficulties in forecasting the response of economic actors to policy changes and recognizing the difficulties in calibrating the appropriate degree of fiscal resilience against shocks or adverse economic outcomes against the challenges in building political support for those policy choices. Finally, after a crisis large uncertainties may remain regarding the pace of recovery in private sector demand and particularly investment. The latter depends on investor confidence and financial market conditions, which in turn are a function of the perceived degree of commitment of the authorities to adhere to the program.

8. Recommendation 2: The internal review mechanism should place relatively more emphasis on the early stages of the process. The staff supports this recommendation, and this is an important feature of recent changes to the review process. Early meetings between the area department and functional departments provide critical input to initial decisions on program design, and the issues and trade-offs raised in this context should inform the presentation in program documents. The report correctly notes that Fund-supported programs evolve greatly during the course of their implementation, and for this reason comments raised during the review process on the occasion of the program reviews are often extensive.

9. Recommendation 3: Programs should give greater emphasis to the formulation and implementation of key institutional reforms in the fiscal area, even if (as is likely) they cannot be fully implemented during the program period. The staff supports this recommendation and welcomes the clarification that the attention to key structural reforms could not substitute for short-term quantitative targets. Staff will have to continue to use careful judgment in identifying fiscal reforms that need to be sustained over time and how to design quantitative performance criteria to safeguard the Fund’s resources. While the staff agrees that structural reforms are, in many cases, more important to fiscal sustainability than short-term expenditure and revenue measures, conditionality needs to focus on actions or quantitative targets that can be monitored during the period of the arrangement. The same considerations apply to strengthening market confidence: market participants need to see signs of progress in the short run to be convinced that a country’s fiscal problems are being addressed. The need for action to be monitorable in the short run is particularly acute during a crisis.

10. Recommendation 4: The surveillance process should be used more explicitly to provide a longer-term road map for fiscal reforms and to assess progress achieved. The staff supports this recommendation with some qualifications. Given that fiscal reforms are already covered in broad terms in Article IV consultations, the report appears to be arguing for a deeper and more comprehensive analysis across countries. This sits somewhat uncomfortably with the Board’s instructions regarding the focus of surveillance as reflected in the 2002 Biennial Surveillance Review. Consistent with these instructions, staff would propose to continue with an approach under which, during Article IV consultations, staff examine those aspects of fiscal policy and its institutional underpinnings that are material to the assessment of macroeconomic policies—following up as needed (and as requested by the authorities) with fiscal Reports on the Observance of Standards and Codes (ROSCs) and technical assistance. Such follow-up, combined with advice from the World Bank and other agencies as appropriate, would assist the authorities in formulating or enhancing a detailed road map for fiscal reform and help guide implementation in specific areas. Any further expansion of the Fund’s role in this area would also, of course, have resource implications that would need to be addressed.

11. Recommendation 5: The IMF should clearly delineate the operational framework in which social issues will be addressed within program design in non-PRGF countries. This should include a clear indication of the IMF’s responsibilities and activities in this area. The staff recognizes the importance of social issues, particularly to the extent that they frequently have implications both for fiscal policy and for program ownership. For instance, it is essential to understand the key social programs and their implications for the sensitivity of public expenditure to macroeconomic developments. Moreover, the experience of some crisis cases, in which it proved difficult to introduce effective and well-targeted social safety nets in the midst of a downturn, supports the suggestion that staff should be open to discussing with the authorities how their existing social protection systems, or those to be designed, would operate under conditions of financial stringency. Given that, under the existing framework, the World Bank takes the lead in designing social safety nets and in identifying high-priority spending, it is essential for Fund staff to collaborate effectively with the Bank on these issues, including by supporting efforts to design social safety nets that are effective in a crisis. These are issues that we will continue to explore and, to the extent possible, take into account in program design in each case.

1

The present report chooses not to deal with technical assistance, arguing that a forthcoming IEO report will address this topic. This is an important priority for the Fund, and it commands a substantial amount of resources and attention.

IEO Comments on Staff Response to the Evaluation of Fiscal Adjustment in IMF-Supported Programs

Executive Board Meeting August 29, 2003

Paragraph numbers refer to the Staff Response on pages 110–12; bracketed chapter and page numbers refer to the main report on pages 3–106.

Paragraph 2: The staff has commented that the evaluation’s “treatment of the appropriateness of the fiscal stance and its effectiveness in achieving program goals is somewhat limited.” Program goals cover a wide variety of objectives and are influenced by the whole set of macro and other policies in the program—not only fiscal. To disentangle the impact of the fiscal stance alone on these overall program objectives would have meant estimating the effects of a counterfactual program, which is beyond the scope of this evaluation.

The evaluation discusses extensively the extent to which programs were able to achieve typical goals such as fiscal deficit, current account deficit, GDP growth, and investment targets. In addition, the case studies provide an evaluation of implementation of fiscal reforms.

Paragraph 3: The staff response states that the role of financing constraints in determining the size of the fiscal adjustment receives less attention than warranted. The evaluation does examine the impact of projected financing on the fiscal adjustment, including an econometric estimate of the magnitude of the link [Chapter 2, page 20]. In addition, the evaluation explicitly recognizes that the fiscal stance cannot be determined solely on countercylical grounds, but must also take account of its impact on market confidence and debt sustainability, particularly in emerging markets [“Summary of Findings and Recommendations,” pages 6–7; and Chapter 5, pages 47–48].

Paragraph 4: We agree with the staff that there are many causes for overoptimism in projecting growth. We also agree that the fiscal response to weaker growth is not clear-cut and depends on financing constraints. However, one of the key findings of the evaluation is the reluctance to project growth slowdowns, let alone negative growth, in programs [“Summary of Findings and Recommendations,” page 6]. This result, together with the finding that program documents often do not discuss the rationale behind the fiscal stance, implies that the pros and cons of a countercyclical fiscal stance in such cases are rarely addressed explicitly [“Summary of Findings and Recommendations,” page 7].

Paragraph 5: The staff response stresses the extensive technical assistance activities to improve tax administration and public expenditure management systems. The evaluation acknowledges these efforts, including preprogram activities. However the point made by the evaluation, based on the programs examined, is a different one: notwithstanding efforts at technical assistance, there is little observable policy action and limited impact during program implementation, particularly in reduction of tax evasion and reallocations of spending (Chapter 7 of the report).

Paragraph 10: The staff response states that Recommendation 4 of the evaluation (“Surveillance should be used more explicitly to provide a longer-term road map of fiscal reforms and to assess progress achieved”) sits somewhat uncomfortably with the Board instructions regarding the focus of surveillance as reflected in the 2002 Biennial Surveillance Review. We do not feel there is any inconsistency. The new guidelines on surveillance that have emerged from the 2002 review (SM/02/292) explicitly stress macro relevance, sustainability, and sound economic growth as the principles for selectivity. In the opinion of the IEO this means that surveillance should focus not only on the magnitude of the short-term fiscal adjustment, but also its sustainability and its quality in terms of efficiency and equity. This is precisely what is recommended by the evaluation [“Summary of Findings and Recommendations,” page 12].

Paragraph 11: The staff response indicates that it “supports the suggestion that staff should be open to discussing with the authorities how their existing social protection systems, or those to be designed, would operate under conditions of financial stringency.” This falls short of the evaluation’s recommendation. In fact, this evaluation recommends that “the IMF could invite the authorities regularly during Article IV consultations to suggest what are the existing critical social programs and social services they would like to see protected in the event of adverse shocks.”

The Acting Chair’s Summing Up Evaluation Report on Fiscal Adjustment in IMF-Supported Programs by the Independent Evaluation Office

Executive Board Meeting 03/83 August 29, 2003

Executive Directors welcomed the report of the Independent Evaluation Office (IEO), which draws valuable lessons for fiscal policy, a central element of Fund-supported programs. They agreed that the report has a number of constructive recommendations whose implementation would enhance the Fund’s advice and programs in the fiscal area. Most Directors were encouraged that some of the common criticisms of fiscal adjustment in Fund-supported programs—notably that Fund-supported programs adopt a “one-size-fits-all” approach, are inflexible, and cause a decline in social spending—were not supported by the empirical evidence presented in the report. A few others felt that the evidence in the report does not fully answer criticisms of the Fund’s approach. Directors also noted that the report found significant weaknesses in the results of fiscal adjustment in programs, noting that fiscal targets were not met in a large number of cases. However, they cautioned against drawing conclusions based on generalizations across a large number of countries, and stressed that the appropriateness of the size, pace, and results of fiscal adjustment can only be assessed against the specific circumstances of each individual country.

Directors reviewed the report’s extensive evidence that addresses the concern that Fund-supported programs always involve fiscal austerity often associated with a contractionary bias. They agreed with the report’s finding that Fund-supported programs vary across countries and are also in many instances revised when necessary to incorporate changing realities. They welcomed the conclusion that there is no evidence that Fund programs are uniformly contractionary, but noted that a contractionary bias could exist in certain circumstances. Some Directors considered that a closer investigation of the appropriateness of the fiscal stance in relation to programsí goals for individual countries could have shed more light on the report’s conclusions.

Directors took note of the report’s finding that, while growth does not typically decline in program years compared to trend, programs’ projections of economic growth rates and private investment tend to be overoptimistic. They agreed with the report’s conclusion that this forecasting bias has at times led to a contractionary bias in fiscal design. Many Directors, however, cautioned that less optimistic growth projections would not necessarily call for a less contractionary fiscal stance, especially in cases in which financing constraints and debt sustainability concerns are paramount and may be exacerbated by lower growth. In such cases, further strong fiscal adjustment may be needed to maintain market confidence and achieve desired levels of investment. Some Directors believed, however, that where debt sustainability is the primary objective, additional capital spending on productive assets would not necessarily jeopardize the program’s objectives. Directors believed that the downside risks to growth projections should be weighed more systematically in program documents, and that the scope for countercyclical fiscal policy should be assessed if these risks were to materialize. Directors also noted the finding that most of the progress in fiscal adjustment took place in the first year of the programs with little progress thereafter, and emphasized the need for a better understanding of this phenomenon.

On the qualitative aspects of fiscal adjustment, Directors noted the report’s finding that Fund-supported programs are not associated with lower public education and health spending than would have occurred in a nonprogram situation. However, they agreed with the report’s assessment that this evidence did not allow them to conclude that the most vulnerable social groups are protected from the economic shocks they may suffer during program years. Directors underscored the need to shield the poor from economic downturns and called for Fund-supported programs to incorporate, to the extent possible, the cost of social safety nets, which should be Summing Up by the Acting Chair developed in advance by the authorities in collaboration with the World Bank.

Directors also agreed with the report’s finding that there is scope for greater attention to reforms to improve tax performance and spending composition in Fund-supported programs. They considered that greater efforts are needed to increase tax compliance, curtail exemptions, and improve collection efficiency, but cautioned against overestimating the yield of revenue administration measures, at least in the short run. In this context, Directors noted the important role of technical assistance in achieving improvements in this area. On expenditure, Directors agreed that programs should put more emphasis on lasting improvements in expenditure patterns, such as by focusing on medium-term civil service reform.

Directors commended the report for crystallizing the issue of the mismatch between the period covered by a single Fund-supported program and the time required to complete structural and institutional reforms. They noted the report’s findings that, in several instances, surveillance has drawn too few lessons from past failures and has not forcefully flagged the need to accelerate key structural reforms in the fiscal area. Directors agreed that programs should focus on key fiscal reforms that can improve the sustainability, efficiency, and equity of the adjustment, even when their adoption requires a longer period than that covered by the Fund-supported program. Most reforms would need to be broken down into discrete steps, and these intermediate targets could be included in program conditionality, while respecting the key principles of the conditionality guidelines. The reforms would also need to be appropriately prioritized and sequenced. Directors stressed the need for fiscal targets to respect existing capacity constraints, or at least to indicate clearly those cases where fiscal adjustment, while required by macroeconomic circumstances, might be beyond the country’s implementation capacity. Directors also noted that successful fiscal reform would require that the authorities have strong ownership of the process.

Directors commented on the specific recommendations in the IEO report.

Recommendation 1: Program documentation should provide a more in-depth and coherent justification for the magnitude and pace of the fiscal adjustment and how it is linked with assumptions about the recovery of private sector activity and growth.

Directors supported this recommendation, and deemed that this initiative would instill greater discipline in program design, enhance transparency, and provide the public and the private sector with a more convincing rationale for the program, thereby helping to overcome political obstacles to implementation. Nevertheless, they recognized that uncertainties regarding key macroeconomic variables, particularly in countries in crisis, and concern about the implementation of policy measures and reforms complicate this task. A few Directors cautioned against spurious precision in such justifications, and others noted that the magnitude and pace of programmed fiscal adjustment may also reflect political constraints. Several Directors stressed the importance of better integrating debt sustainability analyses into program work. Directors looked forward to further staff analysis of the issue of growth projections in the context of the program design discussions.

Recommendation 2: The internal review mechanism should place relatively more emphasis on the early stages of the process.

Directors supported this recommendation. They welcomed Management’s recent initiative aimed at enhancing the effectiveness of the review process, which, inter alia, encourages early consultation between departments.

Recommendation 3: Programs should give greater emphasis to the formulation and implementation of key institutional reforms in the fiscal area, even if (as is likely) they cannot be fully implemented during the program period.

Directors agreed that key institutional reforms can be more critical for fiscal sustainability than short-term expenditure and revenue measures. However, they recognized that short-term measures are hard to avoid in many cases, especially if the immediate objective is economic stabilization. Medium-term institutional reform may be of particular relevance in countries that have achieved macro-economic stability and where “second generation” reforms are necessary to foster growth and reduce longer-term vulnerabilities. Some Directors agreed with the report’s suggestion that reforms should be broken down into those that require executive action, legislation, and capacity building.

Directors, however, pointed out that in crisis situations, the pressing need to resolve the crisis may pose serious constraints on a medium-term approach. They reiterated the conclusion of the discussion on the Evaluation of the Role of the Fund in Recent Capital Account Crises that a crisis should not be used as an opportunity to force long-awaited reforms, however desirable they may be, in areas that are not critical to the resolution of the crisis or to address vulnerability to future crises. Careful judgment will continue to be needed to focus conditionality on those reforms judged critical while at the same time ensuring that adequate progress is made in addressing vulnerabilities and achieving the program’s goals during the period of the arrangement, thus safeguarding the Fund’s resources.

Recommendation 4: The surveillance process should be used more explicitly to provide a longer-term road map for fiscal reforms and to assess progress achieved.

Most Directors agreed that Article IV consultations should play a stronger role in identifying longer-term reform priorities and the causes of past failures in addressing fiscal problems, and that these analyses should inform subsequent program design. In this respect, the various initiatives to distinguish Article IV surveillance from program work are aimed at providing fresh perspectives. Some Directors considered the current framework of surveillance to be adequate for achieving the objectives of the IEO’s recommendation. Directors also called for staff reports to set out in more detail the progress in implementing the recommendations of ROSC and technical assistance missions, as well as key reform priorities. Nevertheless, they under-scored that the ultimate responsibility to develop a fiscal reform agenda resides with the individual country authorities, while the Fund should stand ready to provide advice.

Directors also stressed that, consistent with the Fund’s mandate, surveillance needs to focus on key issues of macroeconomic relevance, which will be different in each country, and should draw on the expertise of other institutions as appropriate. They encouraged the use of cross-country experiences and comparisons, including inputs from regional and multilateral surveillance, to assist in program design. Most Directors viewed Article IV consultations as the appropriate vehicle for staff to identify countries in need of an in-depth fiscal review, stressing that this identification process should be applied uniformly to all member countries of the Fund. In most cases, these needs could be accommodated through technical assistance and ROSCs.

Recommendation 5: The IMF should clearly delineate the operational framework in which social issues will be addressed within program design in non-PRGF countries. This should include a clear indication of the IMF’s responsibilities and activities in this area.

Directors agreed that an important aim of program design should be to protect critical social expenditures. However, they stressed, as recognized in the report, that the Fund should not become involved in the detailed selection and design of social policy; this task is outside both the Fund’s mandate and its expertise. A number of Directors supported the IEO’s call for updating of the 1997 guidelines that direct IMF work in the social area, in order to improve their clarity and effectiveness as an operational tool in protecting the most vulnerable from economic shocks and budgetary retrenchment. Other Directors, however, viewed the existing guidelines as adequate, and a few considered that the annual and medium-term budgets of non-PRGF countries already adequately identify critical social sector programs. These Directors recalled that the new framework for Bank-Fund collaboration on public expenditure issues should enhance countriesí public expenditure reform strategies, including measures to protect critical social spending. Many Directors agreed with the recommendation that staff should inquire, during Article IV consultations, whether the authorities have identified social programs that they would like to protect in the event of a crisis, as they believed this would help dispel the criticism that Fund programs unduly curtail social spending. A few others considered this recommendation impractical, as it would create significant costs and pressures for the authorities with little benefit.

Directors looked forward to two evaluations that the IEO is conducting: those on the Fund’s technical assistance and on the PRSP/PRGF initiatives. Directors stressed that, as the Fund provides extensive technical assistance on fiscal issues, the findings of the first report will be an important complement to the conclusions of the present one. Likewise, Directors anticipated that the forthcoming IEO’s evaluation of PRSP/PRGFs will supplement the report under consideration in the lessons it holds for low-income countries and how they can be implemented.

Directors looked forward to receiving a report from IMF Management on how the report’s recommendations might be addressed and followed up on in the period ahead.
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Cover Fiscal Adjustment in IMF-Supported Programs
Fiscal Adjustment in IMF-Supported Programs
ISBN:
9781589062740
ISSN:
2617-670X
Publication Date:
17 Nov 2003
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589062740.017
Pages:
125

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  • International Monetary Fund (IMF),2002b, “Review of the Poverty Reduction Strategy Paper Approach—Early Experience with Interim PRSPs and Full PRSPs,” SM/02/54, February(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2002c, “Streamlining and Focusing Conditionality and Enhancing Ownership of Fund-Supported Programs—Managing Director’s Report to the International Monetary and Financial Committee,” SM/02/91, Correction 1, and Summing Up by the Chairman(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2002d, “Operationalizing Bank-Fund Collaboration in Country Programs and Conditionality,” Guidance Note issued by Bank and Fund Management to both staffs, April(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2002e, “Assessing Sustainability,” SM/02/166, May(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2002g, “Biennial Review of the Implementation of the Fund’s Surveillance and of the 1977 Surveillance Review—Follow-Up,” SM/02/184 and Supplement 1, June(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2002h, “Is Fund Fiscal Policy Advice Biased in Favor of Tightening?” IMF Office Memorandum by Teresa Ter-Minassian, September(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2002i, “Operational Guidance Note for Staff Following the 2002 Biennial Surveillance Note,” SM/02/292, September(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF),2003d, “Enhancing the Effectiveness of Surveillance: Operational Responses, the Agenda Ahead, and Next Steps,” Public Information Notice No. 03/50(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF), and World Bank,2002, “Strengthening IMF– World Bank Collaboration on Country Programs and Conditionality—Progress Report,” Prepared for the Executive Board by Timothy Geithner of PDR (IMF) and James Adams of OPCS and Gobind Nankani of PREM (World Bank), SM/02/271, August(Washington: International Monetary Fund).

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  • International Monetary Fund (IMF), and World Bank,2003, “Bank/Fund Collaboration on Public Expenditures Issues,” Prepared by FAD (IMF) and PREM (World Bank), SM/03/73, February(Washington: International Monetary Fund).

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  • Structural Adjustment Participatory Review International Network (SAPRIN),2001, “The Policy Roots of Economic Crisis and Poverty: A Multi-Country Participatory Assessment of Structural Adjustment,” November(Washington: SAPRIN).

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  • Tanzi, Vito, 2000a, Policies, Institutions, and the Dark Side of Economics (Cheltenham, England and Northampton, Massachusetts: Elgar).

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  • Tanzi, Vito, Howell Zee, 2001, “Tax Policy for Developing Countries,” Economic Issues No. 27(Washington: International Monetary Fund).

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  • Tanzi, Vito, and Hamid R. Davoodi, 2000, “Corruption, Growth, and Public Finances,” IMF Working Paper No. 00/182(Washington: International Monetary Fund).

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  • Watkins, K., 1999, “Comments on ESAF in the New Millennium,” IMF Economic Forum, Washington.

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  • Algeria 1994 Stand-By Arrangement,“Staff Report for the 1994 Article IV Consultation, Requests for Stand-By Arrangement, and for Purchase Under the Compensatory and Contingency Financing Facility,” EBS/94/99, May 1994; First Review EBS/94/192, September 1994.

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  • Bulgaria 1998 Extended Fund Facility, “Request for Extended Arrangement,” EBS/98/162, September 1998; First Review EBS/99/13, February 1999; Second Review EBS/99/161, August 1999; Third Review EBS/00/45, March 2000; Fourth Review EBS/00/171, August 2000; Fifth Review EBS/01/28, March 2001.

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  • Costa Rica 1995 Stand-By Arrangement, “Request for Stand-By Arrangement,” EBS/95/169, November 1995; First Review EBS/96/82, May 1996.

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  • Ecuador 2000 Stand-By Arrangement, “Request for Stand-By Arrangement; and Exchange System,” EBS/00/66, April 2000; First Review EBS/00/164, August 2000; Second Review EBS/01/72, May 2001; Third and Fourth Reviews EBS/01/200, November 2001.

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  • Egypt 1996 Stand-By Arrangement, “Staff Report for the 1996 Article IV Consultation and Request for Stand-By Arrangement,” EBS/96/149, September 1996; First Review, EBS/97/47, March 1997; Second Review, EBS/97/116, June 1997; Third and Fourth Reviews, EBS/97/238, December 1997; Fifth and Sixth Reviews, EBS/98/107, June 1998; Seventh Review, EBS/98/161, September 1998.

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  • Jordan 1999 Extended Fund Facility, “Staff Report for the 1999 Article IV Consultation, Request for Extended Arrangement, and Use of Fund Resources—Request for Purchase Under the Compensatory and Contingency Financing Facility,” EBS/99/51, April 1999; First Review, EBS/99/180, September 1999; Second Review, EBS/00/132, July 2000; Third Review, EBS/01/136, August 2001; Fourth and Fifth Reviews, EBS/02/67, April 2002.

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  • Pakistan 2000 Stand-By Arrangement, “Staff Report for the 2000 Article IV Consultation and Request for Stand-By Arrangement,” EBS/00/230, November 2000; First Review, EBS/01/39, March 2001; Second Review, EBS/01/101, June 2001; Third Review, EBS/01/161, September 2001.

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  • Peru 1996 Extended Fund Facility,“Request for an Extended Arrangement,” EBS/96/95, June 1996; First Review, EBS/97/12, January 1997; Second Review, EBS/97/102, June 1997; Third Review, EBS/98/81, May 1998; Fourth Review, EBS/98/232, December 1998.

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  • Philippines 1998 Stand-By Arrangement, “Staff Report for the 1997 Article IV Consultation, Final Review Under the Extended Arrangement, and Request for Stand-By Arrangement,” EBS/98/50, March 1998; First and Second Reviews, EBS/98/172, October 1998; Third Review, EBS/99/6, January 1999; Fourth Review, EBS/99/118, July 1999; Fifth Review, EBS/00/136, July 2000.

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  • Romania 1999 Stand-By Arrangement, “Request for Stand-By Arrangement,” EBS/99/141, July 1999; First Review, EBS/00/87, May 2000.

  • Senegal 1998 Enhanced Structural Adjustment Facility, “Request for Arrangements Under the Enhanced Structural Adjustment Facility,” EBS/98/68, April 1998; Midterm Review, EBS/98/188, November 1998; Request for Second Arrangement, EBS/99/114, July 1999; First Review Under Second Arrangement, EBS/00/95, June 2000; Request for Third Arrangement, EBS/01/9, January 2001; First Review Under Third Arrangement, EBS/01/151, August 2001; Second Review Under Third Arrangement, EBS/02/50, March 2002.

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  • Tanzania 1996 Enhanced Structural Adjustment Facility, “Staff Report for the 1996 Article IV Consultation and Request for Arrangements Under the Enhanced Structural Adjustment Facility,” EBS/96/165, October 1996; Request for Second Arrangement, EBS/97/209, November 1997; Midterm Review Under Second Arrangement, EBS/98/113, July 1998; Request for Third Arrangement, EBS/99/5, January 1999; Midterm Review Under Third Arrangement, EBS/99/126, July 1999.

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  • Ukraine 1998 Extended Fund Facility, “Request for Extended Arrangement,” EBS/98/144, August 1998; First Review, EBS/99/42; Second Review EBS/99/79, May 1999; Third Review, EBS/99/170, August 1999; Fourth Review, EBS/00/252, December 2000; Fifth and Sixth Reviews, EBS/01/152, September 2001.

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  • Uruguay 2000 Stand-By Arrangement, “Request for Stand-By Arrangement,” EBS/00/76, May 2000; First Review, EBS/01/117, February 2001; Second Review, EBS/01/164, September 2001; Third Review, EBS/02/46, March 2002.

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  • Venezuela 1996 Stand-By Arrangement, “Staff Report for the 1996 Article IV Consultation and Request for Stand-By Arrangement,” EBS/96/108, June 1996; First Review, EBS/96/162, October 1996.

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