01962cas a2200253 a 4500 AALejournalIMF008814 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451861259 1018-5941 BD-DhAAL BD-DhAAL Baig, Taimur. Underlying Factors Driving Fiscal Effort in Emerging Market Economies / Taimur Baig, Abdul Abiad. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Using a panel dataset of 34 emerging market countries for the period 1990-2002, we examine the roles of various economic, political, and institutional variables in determining fiscal effort, as proxied by the primary surplus. We find that while fiscal effort increases, as expected, with the level of lagged debt, this effect tapers off beyond a certain threshold. We also find an inverse U-shaped relationship between the primary balance and revenue. Fiscal effort rises with positive shocks to oil prices (for oil exporters), when the economy grows above its potential, and in the presence of an IMF-supported program. In contrast, high democratic accountability and strong and impartial bureaucracies help lower market risk and hence lower the relative need for fiscal adjustment. Finally, fiscal effort tends to decline when too many constraints are faced by the executive. Mode of access: Internet Abiad, Abdul. IMF Working Papers; Working Paper ; No. 2005/106 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/106/001.2005.issue-106-en.xml IMF e-Library