Fiscal Crisis and Fiscal Reform in Developing Countries
Author(s)
Toye, J.
Abstract
In recent years, policy-makers in developing countries have responded to crisis of macroeconomic instability with two sets of measures: conventional stabilization policies and policies of economic liberalization. The fiscal implications of this double agenda are set out, following three lines of enquiry. First, how can policies be kept consistent, when some liberalization measures have large adverse fiscal consequences? Second, can a fiscal deficit be reduced without damaging the provision of public services vital for growth and poverty alleviation? Finally, since lack of tax revenue is usually the binding constraint on government intervention, how can this most easily be relaxed?
