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The paper documents the economic development strategies pursued by the Dominican Republic. The study argues that the country's success results from the implementation of a three-pronged economic development strategy. The first prong relates to diversifying production and the second to developing special economic zones. These zones operate in parallel fashion to the rest of the economy but with protections from domestic impediments to growth and progress. The third item in the recipe involves maintaining ample economic and social engagement with the rest of the world. The paper also highlights challenges that the country faces going forward.

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Efficiency of the black market for foreign exchange in a developing country can be assessed by testing whether that market complies with the 'relative' version of the purchasing power parity hypothesis. This paper applies nonstationarity and cointegration to investigate this hypothesis for the Dominican Republic. Both the Engle-Granger and Johansen techniques support cointegration, so the black market for foreign exchange in the Dominican Republic is efficient.

This paper investigates fiscal policy sustainability in Peru, the Philippines, South Africa, Thailand, and Venezuela using competing methodologies. Standard unit roots and cointegration analyses do not endorse the validity of the intertemporal budget constraint. In contrast, to varying degree across-countries, alternative testing employing a fiscal policy reaction function indicates sustainability defined as surplus adjustments in response to higher debt to income ratios. Corresponding debt-dynamics analyses show that corrective measures were put in place to revert non-sustainable trends in government debt. However, ancillary variables in the debt modeling produce statistically weak evidence of procyclical fiscal behavior in the Latin American countries. Tiivistelmä: Tutkimuksessa arvioidaan veropolitiikan kestävyyttä Perussa, Filippiineillä, Etelä-Afrikassa, Thaimaassa ja Venezuelassa. Yksikköjuurten tai yhteisintegroituvuuden testeillä ei saatu tukea budjettirajoitteen pitävyydelle yli ajan. Lisäksi kestävyyttä testattiin veropolitiikan reaktiofunktiolla, jossa kestä-vyys määritellään ylijäämäsopeutumiseksi velka-tulosuhteen muuttuessa. Testeissä havaittiin, että veropolitiikka olisi kestävällä pohjalla. Vastaava velkasopeutuksen analyysi osoittaa, että maat reagoivat tarvittavalla tavalla velan kasvuun. Kuitenkin analyysiä täydentävät muuttujat osoittivat tilastollisesti heikkoa myötäsyklisyyttä latinalaisen amerikan veropolitiikassa. Asiasanat: veropolitiikan kestävyys, veropolitiikan reaktiofunktiot, kehitysmaat SummaryMeasuring fiscal policy sustainability is fundamental, and for developed countries there is ample evidence on the topic. However, the literature on developing countries is more limited, and that is particularly so regarding investigations that contrast country experiences and implement alternative methodological approaches. And yet developing economies are prone to fiscal imbalances.This paper contributes to the understanding of fiscal policy sustainability in developing countries. The investigation focuses on economies from Africa, Asia, and Latin America: Peru, the Philippines, South Africa, Thailand, and Venezuela. The research plan consists in recounting economic and fiscal policy developments in each of these countries, and in employing alternative empirical methods in testing fiscal sustainability.The study finds that the benchmark condition for the government's budget surplus is not binding in Peru, the Philippines, South Africa, Thailand, and Venezuela. However, the investigation also applies Bohn's (1998) fiscal policy reaction function approach. Using this framework the behavior of budget surpluses indicates fiscal sustainability -albeit statistically weakly.Additionally, debt-dynamics analyses show that corrective measures were put in place to revert non-sustainable trends in debt to GDP ratios. Notably, the evidence backing fiscal sustainability in Thailand is particularly robust. In contrast, the results for the Philippines and South Africa are mixed, and rather weak fo...