Experience with Budgetary Convergence in the WAEMU

28 Pages Posted: 31 Jan 2006

See all articles by Ousmane Dore

Ousmane Dore

International Monetary Fund (IMF)

Paul R. Masson

International Monetary Fund (IMF) - Research Department; The Brookings Institution

Date Written: June 2002

Abstract

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.

Keywords: Fiscal policy, Convergence, Integration

JEL Classification: B22, C12, C13, E62

Suggested Citation

Dore, Ousmane and Masson, Paul R., Experience with Budgetary Convergence in the WAEMU (June 2002). Available at SSRN: https://ssrn.com/abstract=879836 or http://dx.doi.org/10.2139/ssrn.879836

Ousmane Dore (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Paul R. Masson

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

The Brookings Institution ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States
202-797-6278 (Phone)
202-797-2968 (Fax)

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