Mtefs and Fiscal Performance: Panel Data Evidence

44 Pages Posted: 20 Apr 2016

See all articles by Francesco Grigoli

Francesco Grigoli

International Monetary Fund (IMF)

Zachary Mills

World Bank - Europe and Central Asia Region

Marijn Verhoeven

World Bank

Razvan Vlaicu

Inter-American Development Bank; University of Maryland

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Date Written: September 1, 2012


In the last two decades more than 120 countries have adopted a version of a Medium-Term Expenditure Framework (MTEF). These are budget institutions whose rationale it is to enable the central government to make credible multi-year fiscal commitments. This paper analyzes a newly-collected dataset of worldwide MTEF adoptions during 1990-2008. It exploits within-country variation in MTEF adoption in a dynamic panel framework to estimate their impacts. The analysis finds that MTEFs strongly improve fiscal discipline, with more advanced MTEF phases having a larger impact. Higher-phase MTEFs also improve allocative efficiency. Only top-phase MTEFs have a significantly positive effect on technical efficiency.

Keywords: Public Sector Expenditure Policy, Debt Markets, Health Monitoring & Evaluation, Banks & Banking Reform, E-Business

Suggested Citation

Grigoli, Francesco and Mills, Zachary and Verhoeven, Marijn and Vlaicu, Razvan, Mtefs and Fiscal Performance: Panel Data Evidence (September 1, 2012). World Bank Policy Research Working Paper No. 6186. Available at SSRN:

Francesco Grigoli (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
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Zachary Mills

World Bank - Europe and Central Asia Region ( email )

1818 H Street
Washington, DC 20433
United States

Marijn Verhoeven

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Razvan Vlaicu

Inter-American Development Bank ( email )

1300 New York Ave NW
Washington, DC 20577
United States

University of Maryland ( email )

3114 Tydings Hall
College Park, MD 20742
United States

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