Front Matter

Front Matter

Benedict Clements, Liam Ebrill, Sanjeev Gupta, Anthony Pellechio, Jerald Schiff, George Abed, Ronald McMorran, and Marijn Verhoeven
Published Date:
March 1998
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    © 1998 International Monetary Fund

    Library of Congress Cataloging-in-Publication Data

    Fiscal reforms in low-income, countries : experience under IMF

    –supported programs / by George T. Abed … [et al.].

    • p. cm. — (Occasional paper; 160)

    • “March 1998”

    • ISBN 1-55775-717-8

    • 1. Fiscal policy—Developing countries. 2. Structural adjustment (Economic policy)—Developing countries. I. Abed, George T. II. International Monetary Fund. III. Series: Occasional paper (International Monetary Fund) ; no. 160.

    HJ1620.F573 1998

    336.3′09172′4—dc21 97-52372


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    The following symbols have been used throughout this paper:

    • … to indicate that data are not available;

    • n.a. to indicate not applicable;

    • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

    • – between years or months (e.g., 1994–95 or January–June) to indicate the years or months covered, including the beginning and ending years or months;

    • / between years (e.g., 1994/95) to indicate a crop or fiscal (financial) year.

    “Billion” means a thousand million.

    Minor discrepancies between constituent figures and totals are due to rounding.

    The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.


    The reform of fiscal policies and institutions lies at the heart of structural adjustment in developing countries. Although the immediate aim of such reform is to reduce fiscal imbalances to achieve macroeconomic stability, the long-term goal is to secure more durable improvements in fiscal performance. To make revenue mobilization more efficient, for example, requires reforming the tax and tariff systems and their administration while, on the expenditure side, fiscal consolidation calls for reorienting public spending from current consumption toward growth-promoting investment in physical infrastructure and in social and human capital.

    This study reviews the fiscal reform experience of 36 low-income developing countries that undertook macroeconomic and structural adjustment in the context of the IMF’s Structural Adjustment Facility (SAF) and Enhanced Structural Adjustment Facility (ESAF) during the period 1985–95. It was carried out in conjunction with a more comprehensive assessment by IMF staff of the Policy and Development Review Department entitled The ESAF at Ten Years: Economic Adjustment and Reform in Low-Income Countries. Against the objectives set out in the programs, the study seeks to assess how far these countries have succeeded (a) in reforming their tax systems and institutions and in achieving programmed revenue targets, and (b) in reducing government absorption while shifting expenditures toward more productive activities. The paper concludes that although notable progress has been made on all fronts, much more needs to be done. More important, it extracts both from the aggregate analysis and from the case studies more specific conclusions and, it is hoped, instructive lessons for program design.

    The study is the result of a considerable collaborative effort by the staff of the IMF’s Fiscal Affairs Department. The authors are indebted to numerous colleagues but especially to Julio Escolano, Reint Gropp, Kristina Kostial, and Janet Stotsky, for their helpful comments on and significant contributions to various drafts; to Alexandras Mourmouras, Zeljko Bogetic, and Ludger Schuknecht for their thorough preparation of case studies; and to Manfred Koch and Keiko Honjo for the collection and organization of data. Diane Cross provided valuable editorial assistance while Asegedech WoldeMariam and Tarja Papavassiliou shouldered the enormous task of data manipulation with great skill and precision. Administrative support was ably provided by Meike Gretemann, Larry Hartwig, Leda Montero, Amy Deigh, and Nezha Karkas. J.R. Morrison of the External Relations Department edited the paper and coordinated production of the publication.

    The opinions expressed in the paper are, of course, those of the authors and do not necessarily reflect the views of the IMF or of its Executive Directors.

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