Budgetary Convergence in the WEAMU

A regional convergence pact adopted recently by the Conference of Heads of States of WAEMU provides a framework for fiscal convergence similar to the European Union’s Maastricht Treaty. Using bivariate co-integration and error-correction models, this paper investigates the relationship between revenue and expenditure in seven member countries to determine the feasibility and nature of the policy adjustment required to meet the new convergence criteria. The results indicate that, in the long run, there is causality running from revenue to expenditure in Burkina Faso and Senegal, from expenditure to revenue in Benin and Togo, a bidirectional causality in Côte d’Ivoire and Mali, and no causality in Niger.Fiscal management;West African Economic and Monetary Union;Government expenditures;expenditure, fiscal policy, expenditures, public debt, budget deficit, government revenue, government spending, fiscal adjustment, fiscal variables, government expenditure, fiscal imbalances, fiscal balance, tax revenue, fiscal data, fiscal discipline, public expenditure, fiscal performance, budget deficits, public finance, fiscal positions, public finances, fiscal deficit, budget constraint, taxation, fiscal policies, budgetary adjustment, budget imbalances, spending cuts, public spending, fiscal indicators, budgetary process, fiscal revenue, fiscal imbalance, expenditure increases, fiscal responsibility, government deficit, fiscal position, debt service, fiscal decisions, fiscal outcomes, fiscal difficulties, fiscal surplus, tax increases, fiscal authorities, budgetary rules, higher expenditure, fiscal equilibrium, fiscal illusion, expenditure objectives, debt obligations, fiscal convergence, primary fiscal balance, total expenditure, expenditure decisions, fiscal consolidation, expansionary fiscal, fiscal criterion, primary fiscal deficit, budget balance, public external debt, fiscal institutions, budgetary discipline, federal government expenditures, foreign debt, current level of debt, budget expenditures, expansionary fiscal policies, expenditure data, government budget, tax increase, fiscal instrument, cuts in government spending

Experience with Budgetary Convergence in the WAEMU

This paper reviews the experience of fiscal adjustment undertaken in the West African Economic and Monetary Union (WAEMU) countries since the entry into force of the 1994 treaty establishing the framework for a regional convergence of national fiscal policies. We propose a measure of the structural deficit that corrects for movements of both the business cycle and terms of trade. Though the fiscal deficit worsened in 1998-2001 in some countries because of terms of trade deterioration and unfavorable movements in the business cycle, convergence stalled even when corrected for these factors. Meeting fiscal deficit targets in the future will be facilitated by a favorable external environment but, in any case, will require a higher revenue ratio and downward pressure on government wages as shares of GDP.

Regional Impact of Cote D'Ivoire'S Sociopolitical Crisis

This paper evaluates the impact of the sociopolitical crisis in Côte d''Ivoire on the economies of its neighbors. Using a nonsubjective weighted index of regional instability in cross-country time-series regressions, it shows that the increase in regional instability caused by domestic instability in Côte d''Ivoire had a negative effect on the growth performance of its most direct neighbors, but no significant effect on the subregion as a whole including the West African Economic and Monetary Union (WAEMU). The paper also examines the channels through which such spillover effects took place.Economic growth;neighboring countries, gdp growth, real gdp, terms of trade, gdp per capita, growth rate, monetary union, international trade, gdp growth rate, growth rates, trade flows, regional integration, aggregate demand, income distribution, export markets, volume of trade, trade routes, economic community, exogenous shock, current account deficit, trading partner, economic integration, trade figures, commodity prices, economic cooperation, gdp growth rates, value of trade, regional trade, gdps, balance of payments

Generational Accounting for France

This paper presents the first set of generational accounts prepared for France, illustrating the impact on different generations of current policy settings. It was developed using age profiles of taxes and transfers drawn from a 1990 survey and recent demographic projections. The results reported suggest that if all living generations were protected from future policy changes, current policy rules would imply a net tax burden on future generations more than 1½ times as large as that on current newborn generations. If the assumption that young living generations are protected is relaxed, a large net-tax imbalance in favor of “babyboomers” emerges.