Fiscal Adjustment and Fund-Supported Programs, 1971-80 (Ajustement budgétaire et programmes bénéficiant de l'aide du FMI, 1971-80) (El ajuste fiscal y los programas Ilevados a cabo con apoyo del Fondo, 1971-80)

A recent staff paper concluded that countries that undertook Fund-supported programs in the 1970s achieved significant absolute and relative reductions in their external deficits and a relative reduction in average domestic inflation rates, compared with other non-oil developing countries. These adjustments generally were not achieved at a cost of lower real rates of growth and consumption. The paper investigates the extent to which reductions in external deficits resulted from adjustments in the financial position of the government (as opposed to that of the rest of the economy). The analysis utilizes national income and monetary survey identities to specify relationships between fiscal and balance of payments variables. The results reinforce the importance attached to fiscal targets and performance clauses in Fund programs. They also show that (i) external imbalances in preprogram years tended to be associated with large fiscal imbalances; (ii) reductions/increases (relative to gross national product (GNP)) in the deficit on the current account of the balance of payments in program years were associated with reductions/increases (relative to GNP) in the overall government deficit (on average, reductions in fiscal deficits accounted for 40 per cent of the reduction in current account deficits); and (iii) the overall balance of payments and domestically financed budget deficit also tended to move in the same direction. Large absolute (and relative) reductions in financial deficits were also observed in the rest of the economy in a number of programs. The paper also examines policies for reducing fiscal deficits in terms of their effects on growth and medium-term balance of payments performance. It argues that policies based on disaggregated analysis are likely to be more useful than those based on aggregative analysis; it stresses the desirability of designing revenue and expenditure policies in consultation with tax specialists and project specialists in major development agencies. /// Une récente étude des services du Fonds aboutit à la conclusion que les pays qui, dans la décennie 70, ont appliqué des programmes bénéficiant de l'aide du Fonds ont sensiblement réduit leur déficit extérieur, en termes absolus et en termes relatifs, et abaissé leurs taux moyens d'inflation par rapport à d'autres pays en développement non pétroliers. Ces ajustements n'ont, en général, pas été opérés au prix d'une baisse des taux réels de croissance et de consommation. La pr