In many countries, well-meant ad hoc tax incentives proliferate over time, creating an opaque corporate tax structure and many unanticipated tax loopholes. Tax authorities in several countries have considered and sometimes introduced minimum corporate taxes. Liability under such a tax is...

The authors show how the various methods commonly used to measure capital flight produce vastly different estimates (with a 100 percent difference between the lowest and the highest, in Mexico's case). They emphasize the importance of the conceptual approach to its measurement. First of all,...

Interest rates fell sharply after Mexico's Brady deal, and private investment and growth recovered. The authors show that the main benefit of debt relief was not to lower expected payments but to reduce uncertainty. Reduced uncertainty was found to be the dominant factor in explaining the...

The paper presents and applies an integrated framework to assess the consistency between fiscal deficits and other macroeconomic targets, in particular output growth and the rate of inflation. The model centers around the government budget constraint and can be used to either derive the...

Survey results in Poland indicate that hard budgets and import comeption can spur state firms to adjust even when privatization lags behind. As they examine the underpinning of Polish reform, the authors address the key question of why managers instigated such adjustment. They examine how...

The subject of this paper is the agreement reached on July 23, 1989 which offered commercial creditors the choice to exchange old debt instruments for new instruments involving debt relief, but partially secured with collateral; or for unsecured instruments without debt relief, but with a new...

Developing countries trying to emerge from recessionary spirals must recognize the importance of public/private interactions in designing growth oriented adjustment programs. They must appreciate the complex impact of fiscal policy on the economy. Turkey is an interesting country for studying...

The decline in private savings since 1982 is arguably the most important problem in high debt countries. A reversal of the trend is essential if growth is to be restored. Three factors predominate : 1) the extent of intertemporal substitution; 2) attitudes toward risk; and 3) private/public...

The story of Mexico's involvement in international capital markets is one of riches to rags and back to riches again. Four periods can be distinguished: stable, steady international borrowing through the 1950s and 1960s; heavy reliance on international loans through commercial bank syndicates...

Bulow and Rogoff showed in 1988 that auction based purchases of debt could not be an effective way to capture the secondary market discount, since the purchase pushes up the secondary market afterward. The author of this report points out another problem with cash debt buy backs - one that...