This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper presents, for the first time, multi-dimensional indices of the quality of budget institutions in low-income countries. The indices allow for benchmarking against the performance of middle-income countries, across regions, and according to different institutional arrangements that deliver good fiscal performance. Using the constructed indices, the paper provides preliminary empirical support for the hypotheses that strong budget institutions help improve fiscal balances and public external debt outcomes; and countries with stronger fiscal institutions have better scope to conduct countercyclical policies.
This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the authors and are published to elicit comments and to further debate.The health of the Russian economy still depends heavily on natural resource revenues. The history of the economic collapse and recovery in 1970-2004 provides new evidence on the sources of Russian economic growth, while a survey of the economic literature suggests that the Russian economy could be viewed as a weighted combination of virtual and normal forces. If the Russian economy is considered to be dominated by normal market economy forces, higher energy export receipts provide an opportunity for structural reforms while compensating for social costs, making the economy less vulnerable to decline in world energy prices. However, the domination of virtual forces-value transfers from the energy sector to strategic enterprises-suggests that high world energy prices are masking an inefficient manufacturing sector, and that the Russian economy is highly vulnerable to energy price declines.
Low-income countries have been hit hard by the sharp increases in world food and fuel prices in 2007-08 and subsequently by the global financial crisis and ensuing recession. The International Monetary Fund (IMF) has responded quickly to the need of its low-income country members to address the impact of these global shocks. It has substantially scaled up its financial assistance to low-income countries and revamped its concessional lending facilities to make them more flexible. Together with the ongoing reforms to streamline structural conditionality, these efforts have formed an important part of the IMF's strategy to help low-income countries address the fallout from the crises. This Departmental Paper provides an initial empirical assessment of the outcome of these efforts and reforms. It examines the responsiveness of macroeconomic policies and structural conditionality in recent IMFsupported programs in a number of low-income countries. We hope the results of this exercise will help improve understanding of how IMFsupported programs in low-income countries have been adapted to the changing economic circumstances and which aspects of program design may need further improvement in the future. Many people contributed to the undertaking of this exercise and to the production of this paper. Hugh Bredenkamp, Deputy Director of the Strategy, Policy, and Review Department of the IMF, and Catherine Pattillo, Advisor and Chief of the Low-Income Countries Strategy Unit of the Department, oversaw the exercise and provided invaluable guidance. The paper benefited enormously from data and comments provided by many staff, both within and outside the Strategy, Policy, and Review Department. Neri Gomes helped with administrative and editorial work, and Joanne Blake and her team helped turn the original paper into this Departmental Paper. We are grateful to all these colleagues.
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