"This paper relaxes some key assumptions in the probabilistic approach to fiscal sustainability. First, the authors identify structural breaks over the sample period used to estimate the covariance matrix of the shocks to the debt ratios. Second, the assumption of normality of the shocks is...

"A resurgence of recent interest in fiscal federalism has been a source of concern among macroeconomic stabilization experts. They argue that a decentralized fiscal system poses a threat to macroeconomic stability as it is incompatible with prudent monetary and fiscal management. The author...

The report titled ‘contingent liabilities: the Colombian experience,’ is the first publication on the management of contingent liabilities in Colombia. Published by the Ministry of Finance and Public Credit (MHCP), the report highlights technical and normative efforts and policy reforms on...

This report concludes that during FY1993/94 to FY002/03 the fiscal policy implemented by the government of Dominica was unsustainable and posed a risk to the stability of the currency board arrangement. Moreover, this report recommends that most of the adjustment required to achieve a...

The report reviews Grenada public expenditures for the period 1995-02 and suggests policy recommendations to achieve fiscal sustainability, improve social service delivery, and reform social protection based on the economic situation of the country at the time. To restore rapid economic growth,...

Mexico needs a comprehensive fiscal reform to alleviate the looming medium-term pressures on its budget. This policy note contributes to the debate on Mexico's looming fiscal challenges. The country's fiscal framework, centered on the 2006 budget and fiscal responsibility law, and prudent fiscal...

"The recent global financial crisis has shaken the confidence of developed and developing countries alike in the very blueprint of financial and macro policies that underlie the western capitalist systems. In an effort to contain the crisis from spreading, the authorities in the US and many...

"Political economy explanations for fiscal profligacy are dominated by models of bargaining among organized interest groups over group-specific targeted benefits financed by generalized taxation. These models predict that governments consisting of a coalition of political parties spend more than...

"The authors describe the main trends of Brazil's fiscal policy during the past decade and analyze (1) the ability to raise the primary surplus in response to external shocks, (2) the pro-cyclical nature of fiscal policy, and (3) the long-run impact of government expenditure composition and...

"The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about...