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Aid, adjustment and public sector fiscal behaviour in the Philippines

journal contribution
posted on 1999-01-01, 00:00 authored by Mark McGillivray, A Ahmed
A common aim of structural adjustment programmes is to expand the tax base of countries undergoing such reforms. Moreover, it is often the case that adjustment programmes are introduced soon after or in conjuction with attempts to stabilize the economies of these countries, which includes attempts to reduce public sector fiscal deficits. It is also the case, of course, that most programmes have been introduced under World Bank and IMF policy-based lending regimes. While aid is obviously tied to domestic policy reforms, comparatively few constraints are imposed on how this money is spent. Bearing this in mind, the paper attempts to answer the following question: does the aid to which structural reforms are tied promote public sector fiscal behaviour which is inconsistent with the aims of these reforms? Does it, for example, reduce taxation effort or lead to larger fiscal deficits than would otherwise be the case? The paper looks specifically at the experience of the Philippines and builds on recent advances in econometric modelling of public sector fiscal behaviour in the presence of foreign aid inflows. It looks at the relationships between aid (both bilateral and multilateral), government expenditure, taxation revenue and domestic borrowing using 1960-92 time-series data.

History

Journal

Journal of the Asia Pacific economy

Volume

4

Issue

2

Pagination

381 - 391

Publisher

Taylor & Francis

Location

Abingdon, Eng.

ISSN

1354-7860

eISSN

1469-9648

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

1999, Taylor & Francis

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