Rebalancing growth toward domestic demand has emerged as a key postcrisis challenge for sustaining developing Asia’s rapid growth in the medium and long term. The central objective of this paper is to explore the role of fiscal policy in the region’s rebalancing process. What matters most...

Developing Asia has weathered the global economic crisis well and is experiencing a rapid, robust V-shaped recovery. According to conventional wisdom, the fiscal stimulus packages put in place by the region’s governments played a key role in the region’s superior postcrisis performance. The...

Fiscal stimulus programs have contributed substantially to developing Asia’s faster and stronger than expected recovery from the global financial crisis. This may lead to political pressures for greater use of countercyclical fiscal policy in the postcrisis period. However, the countercyclical...

Advanced economies have a significantly longer history of using fiscal policy to tackle inequality and promote inclusive growth than those in developing Asia. Therefore, as developing Asia explores the more active use of fiscal policy for inclusive purposes, it can learn from the experiences of...

This paper develops a framework to assess the growth and distribution effects of fiscal resources. Resources are classified as debt, other capital receipts, foreign aid and other unilateral grants, non-tax revenue, including resource rents, seigniorage, and taxes. The framework is used to assess...

In recent years, inequality has risen in the region alongside rapid economic growth. The widening income gap strengthens the case for a government response, and fiscal policy is one of the most suitable policy instruments to promote a more equitable society that provides opportunities for all....

In this paper we empirically explore the relationship between fiscal policy and economic growth in developing Asia. The region’s overall level of taxes and government spending are substantially lower than those prevailing in advanced economies. Nevertheless, there are conceptual grounds why...

A crisis provides an opportunity to examine how an economy works under pathological conditions. What are the lessons? Markets work well most of the time. That said, the global financial crisis has weakened faith in the market’s self-equilibrating qualities. Fiscal policy works well to offset...

The central objective of this paper is to empirically examine the issue of fiscal sustainability in developing Asia. To do so, we first diagnose the region’s public finances by analyzing the evolution of key fiscal indicators over time and across subregions. We then estimate fiscal policy...