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Public finance in adjustment programs

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  • Chhibber, Ajay
  • Khalilzadeh-Shirazi, Javad

Abstract

This paper reviews the experience with public finance issues under adjustment programs. This experience shows that fiscal changes are often triggered by budget and balance of payment crises. As a result, short-term considerations have dominated the policy measures introduced. Traditional stabilization policies usually emphasize measures aimed at reducing aggregate demand. On the fiscal side, this has implied cutbacks in public expenditures. There is, however, growing recognition of the need for more growth oriented adjustment programs, which entail a more comprehensive and durable approach to fiscal reform and therefore require a medium-term perspective. Countries committed to fundamental reform of fiscal and other key policy areas should be able to avail themselves of external financial support that lasts long enough for them to initiate and sustain the change process. They must strike a balance between stabilization and adjustment.

Suggested Citation

  • Chhibber, Ajay & Khalilzadeh-Shirazi, Javad, 1988. "Public finance in adjustment programs," Policy Research Working Paper Series 128, The World Bank.
    • Handle: RePEc:wbk:wbrwps:128
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    References listed on IDEAS

    as
    1. World Bank, 1988. "World Development Report 1988," World Bank Publications - Books, The World Bank Group, number 5971.
    2. Anand, Ritu & Chhibber, Ajay & van Wijnbergen, Sweder, 1988. "External balance, fiscal policy, and growth in Turkey," Policy Research Working Paper Series 86, The World Bank.
    3. Fischer, Stanley, 1986. "Issues in Medium-term Macroeconomic Adjustment," The World Bank Research Observer, World Bank, vol. 1(2), pages 163-182, July.
    4. Balassa, Bela, 1988. "Public finance and economic development," Policy Research Working Paper Series 31, The World Bank.
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    Cited by:

    1. Ahmad Khan, 1993. "Presumptive Tax as an Alternate Income Tax Base: A Case Study of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 991-1004.
    2. Ajay Chhibber & Mansoor Dailami, 1993. "Fiscal Policy and Private Investment in Developing Countries: Recent Evidence on Key Selected Issues," Palgrave Macmillan Books, in: Riccardo Faini & Jaime Melo (ed.), Fiscal Issues in Adjustment in Developing Countries, pages 121-150, Palgrave Macmillan.
    3. Chhibber, Ajay & van Wijnbergen, Sweder, 1988. "Public policy and private investment in Turkey," Policy Research Working Paper Series 120, The World Bank.
    4. Mitra, Pradeep, 1990. "The coordinated reform of tariffs and domestic indirect taxes," Policy Research Working Paper Series 490, The World Bank.
    5. Foroutan, Faezeh, 1992. "Regional integration in sub-Saharan Africa : experience and prospects," Policy Research Working Paper Series 992, The World Bank.

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