Cover Departmental Papers
Buy Book in Print
Strengthening the West African Economic and Monetary Union: The Role of Fiscal and Market Institutions in Economic Stabilization
Author:
Olivier Basdevant
Search for other papers by Olivier Basdevant in
Current site
Google Scholar Close
,
Patrick A. Imam
Search for other papers by Patrick A. Imam in
Current site
Google Scholar Close
,
Mr. Tidiane Kinda
Search for other papers by Mr. Tidiane Kinda in
Current site
Google Scholar Close
, and
Ms. Aleksandra Zdzienicka
Search for other papers by Ms. Aleksandra Zdzienicka in
Current site
Google Scholar Close
Series:
Departmental Papers
Volume/Issue:
Volume 2015: Issue 011
Language:
English
Publication Date:
23 Oct 2015
DOI:
https://doi.org/10.5089/9781513567334.087
ISBN:
9781513567334
ISSN:
2616-5333
Pages:
27
Keywords:
DPPP; DP; insurance fund; government; bridge funding; WAEMU country; WAEMU authorities; WAEMU convergence criteria; WAEMU member country; WAEMU economy; Fiscal rules; Fiscal councils; Insurance; West Africa
Legal-disclaimer:
The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (1.2 MB) Download Epub
West African Economic and Monetary Union (WAEMU) countries face a well-known dilemma between the need to provide shock-smoothing mechanisms and the lack of adequate mechanisms to do so. WAEMU countries are subject to frequent and, to a large extent, asymmetric shocks. They have remained poorly diversified and vulnerable to external shocks, such as changing weather conditions. In addition to limited shock-smoothing mechanisms at the regional level, WAEMU members’ ability to respond to shocks through national policies is also constrained by limited fiscal space and the need to preserve external stability—not only at the national level but also at the union level. In this context, developing a well-defined fiscal rule framework at the national level would help to build the necessary fiscal space for shock-smoothing. In addition, the development of specific shock-smoothing mechanisms—including a more developed and integrated financial sector—would also be critical. In addition, promoting financial development is also a challenge, which needs to be addressed in tandem with an adequate surveillance system. Some of these challenges have been faced by other monetary unions, such as the euro area.
  • Collapse
  • Expand
Cover Departmental Papers
Departmental Papers
ISSN:
2616-5333
Publisher:
International Monetary Fund