IMF-财政整合：评估成功因素、影响和设计（英）

Fiscal

Consolidation:Taking

Stock

of

Success

Factors,

Impact,and

DesignVybhaviBalasundharam,OlivierBasdevant,DalmacioBenicio,AndrewCeber,Yujin

Kim,LucaMazzone,Hoda

Selim,andYongzhengYangWP/23/63IMF

Working

Papers

describe

research

inprogress

by

the

author(s)

and

are

published

toelicit

comments

and

to

encourage

debate.Theviewsexpressed

inIMFWorkingPapersarethoseoftheauthor(s)anddo

notnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,orIMFmanagement.2023MAR©2023InternationalMonetaryFundWP/23/63IMF

Working

PaperFiscalAffairsDepartmentFiscal

Consolidation:

Taking

Stock

of

Success

Factors,

Impact,

and

DesignPrepared

by

Vybhavi

Balasundharam,

Olivier

Basdevant,

Dalmacio

Benicio,

Andrew

Ceber,

Yujin

Kim,Luca

Mazzone,

Hoda

Selim,

and

Yongzheng

ZhangAuthorizedfordistributionbyJamesDanielMarch2023IMF

Working

Papers

describe

research

in

progress

by

the

author(s)

and

are

published

to

elicitcomments

and

to

encourage

debate.

TheviewsexpressedinIMFWorkingPapersarethoseoftheauthor(s)anddonotnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,

orIMFmanagement.ABSTRACT:

SurgesinpublicdebtinmanycountriessincetheCOVID-19pandemichaverekindledinterest

infiscalconsolidations,whichoftenentaildifficultpolicychoicesinthefaceofeconomicandpoliticalconstraints.Thispaperpresentsfindingsfromasurveyoftheliteratureonfiscalconsolidations,focusingonthepre-existingconditions,

impactanddesignaspectsofpast

consolidationepisodes.Thesefindingsprovideinsightintofactorsthatinfluencethe

chanceofsuccessfulconsolidations,theirgrowthanddistributionalimpact,thepace,phasing,durationandpolicymixofreformstomitigatethe

impact,andtheroleoffiscalinstitutionsandcapacitydevelopmentinsuccessfulconsolidations.JELClassificationNumbers:Keywords:E62,H2,H5,H6FiscalConsolidation;taxation;governmentspending;institutionsVBalasundharam@,OBasdevant@,DBenicio@,ACeber@,YKim9@,LMazzone@,HSelim@,YYang@Authors’E-MailAddresses:*Theauthors

wouldliketo

thankIMFcolleagueswhocommentedon

earlierversionsofthepaperandthosewhoparticipatedinFundseminarsinSeptember2022andJanuary

2023.Specialthanksto

James

DanielandPaoloMauroforextensivecommentsandguidance,andArikaKayastha,

VonAllena,

andZaneGoinsfor

their

excellentresearchandeditorialassistance.IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignWORKING

PAPERSFiscal

Consolidations:Taking

Stock

of

the

SuccessFactors,

Impact,

and

DesignPreparedbyVybhaviBalasundharam,OlivierBasdevant,DalmacioBenicio,AndrewCeber,YujinKim,LucaMazzone,Hoda

Selim,andYongzheng

YangIMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

and

DesignContentsIntroduction

4Pre-Existing

Conditions

for

Successful

Fiscal

Consolidations7Growth

and

Distributional

Impacts

of

Fiscal

Consolidations9Approaches

to

Fiscal

Consolidations18Policy

Implications26References28BOXES1.Self-DefeatingFiscalConsolidations

102.Portugal:Cushioningthe

DistributionalandSocialImpactof2011-14FiscalConsolidation133.MethodologiesforEstimatingFiscalMultipliers

174.RoleofClimatePoliciesin

SupportingFiscalConsolidation225.ImpactofInflationonFiscalConsolidation23TABLES1.SummaryofKeyLiteratureFindingsonFiscalConsolidations52.SelectedMultiplierEstimates16INTERNATIONALMONETARYFUND2IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

and

DesignGlossaryAEsAdvancedEconomiesCDCapacityDevelopmentIMFInternationalMonetaryFundFTEFiscalTransparencyEvaluationECBEMsEuropeanCentralBankEmergingMarketEconomiesERMIEOExchangeRateMechanismIndependentEvaluationOfficeoftheInternationalMonetaryFundLow-IncomeDevelopingCountriesOrganisationforEconomicCo-operationandDevelopmentPublicFinancialManagementLIDCsOECDPFMPEFAPIMASDGsTADATZLBPublicExpenditureandFinancialAccountabilityPublicInvestmentManagementAssessmentSustainableDevelopmentGoalsTaxAdministrationDiagnosticAssessmentToolZero-LowerBoundINTERNATIONALMONETARYFUND3IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignIntroductionUnprecedentedsurgesinpublicdebt

inmanycountriessincetheCOVID-19pandemichaverekindledinterest

infiscalconsolidation.Althoughdebt-to-GDPratioshavedeclined

somewhatinmanycountriesinthewakeofeconomicrecoveryandhigherthanexpectedinflation

in2022,theyremainelevatedandabove

pre-pandemiclevelsinmostcountries.Inthecomingyears,manycountrieswillneedto

bringdownfiscaldeficitsto

rebuildfiscalspace,andforsome,thistaskis

urgentastheircurrentpublicdebtlevelshavebecomeunsustainable.Infact,about60percentoflow-incomecountriesand30

percentofemergingmarketeconomiesareathighriskof

oralreadyindebtdistress(IMF,2022a).Moreover,manycountrieswillhavetoaddressmounting

spendingpressuresoverthecoming

years,includingthosefrominfrastructureinvestment,

climate

changemitigationandadaption,andageingpopulation,whichwillincreasespendingonpensionandhealthcare,especiallyinadvancedeconomies(AEs)andemergingmarketeconomies(EMs)(IMF,2022b).1

Formanylow-incomedevelopingcountries(LIDCs),it

isdauntingchallengetomeettheirsustainabledevelopmentgoals(SDGs)inthefaceofeconomicscarringcaused

bythepandemicwhilekeepingtheirdebtatasustainable

level.Fiscalconsolidation

isacomplexundertakingandoftenentailsdifficultpolicychoicesto

achievepolicyobjectives.Thefiscal

consolidationdebateisnotnewandhasinitiallyfocusedontheshort-termoutputimpact.Overtime,however,ithasevolvedtounderstandmorespecificaspectsofconsolidationdesign.

Forexample,policymakershavetodecidehowmuchtheyhavetoreducethefiscaldeficit,

whetherthedeficitreduction

shouldcomefromraisingadditionalrevenueorcutting

expenditureorfromboth,whenisthebesttimetostarttheconsolidationprocess,

howlongandhowfasttheconsolidationeffortshouldbe,whethertofrontloadorbackloadthepolicymeasures,aswellaswhatrole,ifany,togivetofiscalinstitutionalreform.Inmakingthesechoices,policymakerswillalsoneedto

considerpoliticalandsocialfeasibilityandramificationsinaddition

totheireconomicimpact.Thispaperaimstoprovidean

overviewofthelessonslearnedfrompastfiscal

consolidationepisodesbasedonaliteraturesurvey.InternationalinstitutionssuchastheIMFandOECDundertakeperiodicreviewsandad

hoc

studiesoffiscalconsolidation

issuestoguidetheiroperationalwork(OECD,2010,2012and2013;IMF,2014a;EyraudandWeber,2013;IMF,2010a;IMF,2010b,andDanieletal.,2006),buttherehasbeen

no

comprehensiveupdateinrecentyears.Therearealsostreamsofresearchfocusing

onspecificissuesrelatedtofiscalconsolidations,suchasfiscalmultipliers(AuerbachandGorodnichenko,2012;Ilzetzki,Mendoza,andVégh,2013)andtheir

economicimpact(Carrière-Swallow,David,andLeigh,2021;Guajardo,Leigh,Pescatori,2014).Moreover,theglobaleconomiclandscapehaschangedsubstantiallysincetheGlobalFinancialCrisis,whichpromptedanincreaseintheresearchonfiscalconsolidationissuesfocusing

initiallyonAEs.A

clearerunderstandingofthelessonslearnedfromthepastexperiencescouldhelppolicymakersformulateappropriatestrategiesforfiscalconsolidationinmeetingboththeirshort-andlong-termchallenges.Thispapercontributestothe

literatureonfiscalconsolidationacrossseveraldimensions.First,itprovidesacomprehensive

stocktakingof

theliterature,includingthe

considerableamountofresearchsincetheGlobalFinancialCrisis.Second,theliterature

surveycoversallincomegroupsofcountries—LIDCs,EMs,andAEs—andattemptstodifferentiatelessonslearned

forthesegroups.Third,giventheincreasinginterest

intheissueof

inequalityamongpolicymakers,thissurveyalsocoverstheimpactoffiscalconsolidationson

incomedistributioninadditiontoeconomicgrowth.Fourth,effortsarealsomadetoshedlightonthe

politicaleconomyoffiscalconsolidations,anareathatis

notyetasdevelopedas

otherareasintheliterature,eventhoughithasbeenincreasinglyrecognizedasanimportantaspectofprogramimpactanddesign.Finally,areviewof

theroleoffiscalinstitutionsandcapacitydevelopment—anincreasingfocusofpolicymakersanddevelopmentpartnersinLIDCs—isalsoprovided.Therestoftheworkingpaperisorganizedasfollows.SectionIIexaminesthehistoricalrecordoffiscalconsolidationsandfactorsthatinfluencetheir

chancesof

success,followedbyasurveyofgrowthanddistributional1IMF(2022b)MethodologicalandStatisticalAnnex,Tables23–25.INTERNATIONALMONETARYFUND4IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignimpactsoffiscalconsolidations—includingestimatesoffiscalmultipliers—inSectionIII.Issuesrelatedtoapproachestofiscalconsolidation

intermsofsize,pace,duration,phasing,andcompositionofthe

adjustmentaretakenupinSectionIV,andthoseonhowfiscal

institutionsand

capacitydevelopmentcan

supportfiscalconsolidationarediscussedin

SectionV.Thepaperconcludesin

Section

VIwithkeytakeawaysonpolicyimplications.Itshouldbenotedattheoutsetthat,despiteavoluminousempiricalliterature,anypatternsinthe

surveyedstudiesanddatashouldbeseenassuggestiveratherthanconclusive.

Specifically,many

empiricalregularitiessummarizedinthispaperaretentative,andnotnecessarilyrobusttochangesin

sampleormethodology.Moreover,thefocusoftheliteraturehasbeenonAEs.Thereadershouldthusexercisecaution,particularlywheninterpretingandusingthefindingsonAEsinthecontextofan

EMandLIDC,withthelattertwogroupsalsopossiblyneedingdifferentiation.Table1below

providesasummaryofthe

keyfindingsofthissurveyand

servesasaquickguide.Thereaderisencouragedtoread

thecorrespondingsectionsofthispapertofullyappreciatethenuancesofthesefindings.Table

1.

Summary

of

Key

Literature

Findings

on

Fiscal

ConsolidationsTopicFindingsApplicability*AEsPre-existingconditionsconducivetosuccessoffiscalconsolidations:Inadditiontoprogramdesign(seebelow),whatfactorsmaycontributetothesuccessoffiscalThesuccessrateofhistoricalconsolidationepisodesisfoundtobe1/5–2/3,dependingontheapproachesandcriteriausedtoassesstheoutcome.Factorsthatincreasetheprobabilityofsuccessinclude:•highincome

levels,•

favorableglobalanddomesticenvironment,•

strongfiscalinstitutions,AllAllconsolidations?•

astrongtrackrecordinfiscalmanagement,and•

broad-basedpolitical

supportandgoodcommunication.Growthanddistributionalconsequences:Howdofiscalconsolidationsaffecteconomicactivityandincomedistribution,andhowdotheoutcomesinturnaffecttheconsolidationprocess?Fiscalconsolidationsoftenhaveshort-termadversegrowthanddistributionalimpactscomparedtothepre-consolidationperiod.Even

so,consolidationsmayimprovegrowthperformance

relativetothecounterfactualofno-consolidation.Short-termgrowthimpactasmeasuredbythefiscalmultiplierdependsonstructuralcharacteristicsandcyclicalconditionsoftheeconomy,e.g.,largerimpactinmoreclosedeconomiesand

duringeconomicdownturns.AllInpastepisodes,expenditure-basedconsolidationswidenedincomeinequalitymorefrequentlythantax-basedconsolidations;fasterconsolidationsalso

moreoftenworsenedinequality.AEs;AllAccommodativemonetaryandexchangeratepoliciesandreformstofacilitateadjustmentinlaborandproductmarkets,andtargetedsocial

assistancecanalleviateshort-termadverseoutputanddistributionalimpactsoffiscalconsolidation.AllAllConsolidationscanboostgrowthandimproveequalityinthelongrun,especiallyifpublicinvestmentand

socialspendingareprotected.INTERNATIONALMONETARYFUND5IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignGrowthanddistributionalimpactsfeedbacktotheconsolidationprocessandaffectfinaloutcomesviasocialandpoliticalrepercussions,as

wellaseconomicchannels.AllAllApproachestofiscalProgramdesignshouldreflectcredible

commitmenttofiscalreforms.Acredibleplaneasesfinancingconstraintsandallowsforgreaterpolicy

space.consolidation(programdesign):whatdoweknowaboutthesize,pace,duration,phasing,andpolicycompositionofpastfiscalconsolidationsandtheirimplications?Mostconsolidationepisodesimprovedthecyclicallyadjustedprimarybalance(CAPB)by1-2percentofGDPperyearandlasted3-4years;fasterconsolidationswerelikelydrivenby

largerandmoreurgentneedsforreform.AllFront-loadedconsolidationswereoftendrivenbyconcernsaboutfiscalsustainabilityand/orcreditriskpremia(financingconstraints).EMsandAEsGradualandback-loadedconsolidationstendtostabilizedebtmorepermanentlywithmorecontainedoutputlosses;theyalsoallowtimeforcapacitydevelopmentinLIDCs.However,suchconsolidationsrequireexternalfinancingandmarketconfidence.All,butmorerelevantforEMsandLIDCsRevenue-raisingmeasuresarefoundtobemoredurableindeveloping

countrieswhererevenue-to-GDPratiosaremodesttobeginwith.EMsandLIDCsLargeconsolidationsgenerallyrequirebothrevenueandexpendituremeasures.AllAllProtectingthevulnerablehelpsmitigatethe

short-termdistributionalimpactsandminimize

socialandpoliticalcostsoffiscalconsolidation.Cutsincapitalinvestment,education,andhealthshouldbeavoidedtopreservegrowthpotentialinthelongrun.AllAllTaxmeasuresshould

ideallytargetlessdistortionarybasessuchaspropertytaxes,excisedutiesonsingoods,andenvironmentaltaxes.Aneffective

communication

strategyshouldbepartofthedesignandimplementationof

fiscalconsolidationprograms.AllAllTheroleofinstitutionsandFiscalconsolidationprogramsshouldbeunderpinnedbyacapacitydevelopment:what

crediblemedium-termfiscalframeworksupportedbyroledotheyplayinprogram

soundinstitutions.designandimplementationSoundfiscalrulesandpublicfinancialmanagement(PFM)throughtheirimpactonsystemshelpstrengthenfiscaldisciplineandmeetAllAllcapacity,transparency,andadjustmenttargets.accountability?Transparencycontributesto

successfulfiscalconsolidationsby

improving

programdesign(e.g.,realisticINTERNATIONALMONETARYFUND6IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignmacro-forecastsandpublicdebate)andgovernmentaccountability.Building

strongbudgetaryinstitutionstakestimeandLIDCsandEMsneedstobewellsequenced

andundertakenearlyon.Capacitydevelopmentshouldbepartofthedesignoffiscalconsolidationprograms,tailoredtothecountries’needs,andstartasearlyaspossible.LIDCsandEMsLDICsCapacitydevelopmentshouldfocusonrevenuemobilizationandcorePFMfunctionsinlow-capacitycountries.*Findings

areindicatedto

beapplicabletoaparticularcountry

groupeitherbecausetheresults

arebasedonresearchonthatgrouporconsideredtobebroadly

relevantforthat

group.All—all

countries;AEs—advancedeconomies;EMs—emergingmarket

economies;LIDCs—low-incomedevelopingcountries.Sources:Authors’compilationofthefindings

inthis

paper.Pre-Existing

Conditions

for

Successful

FiscalConsolidationsThis

survey

suggests

that

the

success

rate

of

historical

fiscal

consolidations

ranges

from

1/5

to

2/3,

depending

on

theapproaches

and

criteria

used

to

assess

its

outcomes.

Several

factors

increase

the

chances

of

success,

including

asupporting

global

and

domestic

environment,

strong

fiscal

institutions

as

reflected

by

a

good

track

record

in

fiscalmanagement,

and

broad-based

political

support

and

effective

communication.Whatmakesafiscalconsolidationsuccessful?Afiscalconsolidationis

consideredsuccessfulwhenaminimumlevelofex-postcontroloverfiscalbalanceand/ordebtratioisachievedormaintained

overaspecifiedperiod,includingwhencomparedwithex-anteobjectives.Itis

usuallymarkedby

sustainedimprovementsinthecyclicallyadjustedprimarybalance(CAPB)2

and/orinthegrosspublicdebt-to-GDPratiotomeetcertainthresholdforsomeperiodaftertheconsolidation.However,thechanceofsuccessforafiscalconsolidationisinfluencednotjustbyitsdesign.3

Knowingtheircontributingfactorsandrisksoffailurewouldhelpstrengthenprogramdesignandprepareremedialactionsandcontingencyplans.Successratesoffiscalconsolidationrangefromabout1in5episodesto2in3,

largelydependingontheapproachtakenandthethresholdappliedtodefinesuccess.4

Amongthetwobroadapproachesfordefinitionsofsuccessfulfiscalconsolidationsintheliterature,thefirstapproachexamineswhetherafiscalconsolidationepisodeachievesex-postoutcomesinlinewithex-anteobjectives/targets.Thesecondapproachfocusesexclusivelyonex-postachievementofaminimumthresholdimprovementin

keymacro-fiscaloutcomes(i.e.,fiscalbalanceanddebtratio)andassesseswhethertheyareachievedoveraspecifiedtimeorlonglasting.Thereviewoftheliteraturebasedonthefirstapproach(Mauro

andVillafuerte,2013;andMauro,ed.,2011)suggeststhatthesuccessraterangesfrom38tounder50percent,whereasthatunderthesecondapproachrangesfrom21to65

percent(McDermottandWestcott,1996;Alesinaand

Perotti,1995;AfonsoandJalles,2011;Afonso,2010;IMF,2010a;andLambertiniand2TheCAPBmeasures

discretionaryfiscalpolicy

andothernoncyclicalfactors

by

excluding,inadditiontointerestpayments,theautomatic

effects

of

businesscyclefluctuations(throughtransfersand

taxes)onthebudget.34Policychoices,asreflectedinthe

designfeaturesof

afiscaladjustment

program,

arediscussedinSectionIV.Thestudiesexaminingpre-existingconditionsfor

successfulconsolidationssurveyedherecoveredonlyconsolidationexperiences

ofadvancedcountries

overbroadlysimilarperiods,mostly

rangingfrom1960/70sto

mid/late1990s,with

some

studiesspanninga

longertime

periodfrom1970to

2010s.INTERNATIONALMONETARYFUND7IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignTavares,2000).Notsurprisingly,forthelatterapproach,themorestringentthecriteriathelowerthesuccessrate,andvice

versa.5

Thatsaid,thedifferentcriteriaappliedonlyexplainpartofthewidelydispersingsuccessrates.MauroandVillafuerte(2013)foundthatfortheG7during1976-2007

andEUcountriesduring1991-2007,deviationsofex-postoutcomesfromex-ante

planswerefrequentandlargeand

oftenstemmedfromunforeseenmacroeconomicshocksthataffectgrowth,interestrates,andexchangerates.Highincomelevelsandfavorableglobalanddomesticconditionsarefoundtoincreasetheprobabilityofsuccess.High-incomeOECDcountriesaremorelikelytosucceedintheirconsolidationeffortsrelativetoEMs

andthesamefindingholdsforEMs

relativetoLIDCs(AdamandBevan,2003;andHeylenandEveraert,2000).Thiscouldbebecausehigherincome

isoftenassociatedwithstrongerinstitutionsandthusagreatercapacitytodesignandimplementfiscalreforms.Additionally,strongglobalanddomesticgrowth,lowinterest

rates,acompetitivelyvaluedcurrencyandrisingnetexportdemandincreasetheprobabilityofsuccess.6

Theliteratureisnotconclusiveontheroleofanexchangerateregimeinimprovingsuccessrates.However,LambertiniandTavares(2000)findthatsuccessfulconsolidationamongOECDcountriesis

almostalwaysprecededbylargenominaland

realexchangeratedepreciationwhileunsuccessfulonesareprecededbyrevaluationandfollowedbydepreciation.Moreover,theyfindthatdepreciationisa

significantpredictorofthepersistenceofadjustments.Thequalityoffiscalinstitutionsis

keytothesuccessofconsolidationprograms.7

IMF(2014b)examinedG-20countriesandfoundthatthosewithstrongerfiscal

institutionsi)deliveredasignificantlystrongerfiscaladjustment,

ii)werequickertoputtogetherafiscaladjustmentplan,iii)tendedtoprotectpublicinvestmentintheconsolidation,

iv)tendedtoimplementtheplan

betterbecausetheyadheredtotheirannualbudget,andv)werebetteratresponding

toexternalshocksandabletoreallocateexpenditureandsticktotheoriginaladjustment

plan.Further,astrongtrackrecordinfiscalmanagementcanimprovethelikelihoodof

successfulconsolidation.In

contrast,ahistoryofpoorfiscalmanagementasmeasuredbyrecurringlargedeficitsandelevateddebtseemstohaveadverseeffectsonachievingandmaintainingasustainablefiscalstance.

ApoorlegacydissipatesrapidlyforOECDandmiddle-incomecountries,butnotforLIDCs(Adamand

Bevan,2003).Thisfinding

maypointtotheimportance

ofinstitutions,commitmenttoreform,andcredibilityforsoundpolicymaking.Moreover,theseobservationssuggestthattheremaybeaminimumthresholdofinstitutionalqualityabovewhich

capacitytocarryoutfiscal

consolidationcanincreaserapidly.Broad-basedpoliticalsupportisconduciveto

successfulconsolidationefforts.MauroandVillafuerte(2013)findthatwhereascross-countryevidence

yieldsmixedresultsontheroleofpoliticalfactors,thepresenceorbuildupofpublicsupport,lowerparliamentaryfractionalizationandperceptionsofgreaterpoliticalstabilityaretosomeextentassociatedwithbetterviabilityorimplementationof

consolidationplans.Baldaccietal.

(2004)andClements,Gupta,andJalles(2022)provideevidencethatgovernmentswith

aparliamentarymajorityand

facingnoimminentelectionsaremorelikelyto

succeed

in

fiscalconsolidations.Thisis

consistentwiththetheorythatpoliticalcyclesdrivefiscaloutcomes(PerssonandTabellini,2003)andtheevidencethatnewlyelectedgovernmentsaremorelikelytosustainaconsolidation(Molnár,2012).Moreover,varioustypesofgovernmenthaveundertakensuccessfulconsolidations,butcoalitiongovernmentsseem

tohavealess

successfultrackrecord(AlesinaandPerotti,1995),perhapsowingtoinherentchallengesforacoalitiongovernmentinconsensusbuildingandsustainedimplementationofconsolidationmeasures.Itshouldalsobe

notedthatthereisatwo-wayrelationshipbetweenfiscalconsolidationsandpoliticaldynamics.Largedeficitspriortoelectionyearsarefound

toreducetheincumbent’sre-electionchancesindemocracies(BrenderandDrazen,2005).Andfiscalretrenchmentisfoundtocorrelate

withincreasedsocialinstabilityandpotentiallycarrieslargeelectoralcosts,therebyunderminingthedurabilityoffiscalconsolidations(Alesinaetal.,2021;PonticelliandVoth,2020;andChen

etal.,2019).5Amongthesurveyedstudies,AlesinaandPerotti(1995)reportedthelower-endsuccess

rateof21percent

usingthecriteriaof

atleast

5percent

ofGDPdeclineingross

debt

threeyearsfollowingconsolidationand

anincreaseinthestructuralprimarybalancebyatleast

1.5percent

ofGDPperyearduring1960-92.

Bycontrast,AfonsoandJalles

(2011)identifiedtheupper-boundsuccessrateof

65percentbasedonthecriteriaof

two-yearimprovementintheCAPB

by

at

leastonestandarddeviationof

thesample(1.6percentofGDP).Thisassumesthattheprimacy

of

maintainingsoundmonetaryandexchangeratepolicies

is

notcompromisedinsuch

policysettings.Foramoredetaileddiscussionofinstitutions

inthecontext

of

fiscalconsolidation,see

SectionV.67INTERNATIONALMONETARYFUND8IMF

WORKING

PAPERSFiscalConsolidations:

TakingStock

of

theSuccessFactors,

Impact,

andDesignThesefindingsonthepoliticaleconomyoffiscalconsolidationssuggestthatpolicymakersshouldhaveaneffective

communicationstrategyforfiscalconsolidationprograms.Giventhatcertainrevenueandexpendituremeasureshavepredictable

impactonvariousinterestgroups,policymakersneedtoengagewithkeystakeholdersearlyonduringprogramdesignandstriketherightbalanceinthepolicymixtoovercomepoliticalheadwindstoconsolidation,ratherthandelaynecessaryreforms.Inthisregard,Mauro

(2011)stressesthecriticalroleofacomprehensiveplan

inshapingpublicopinionsregarding

fiscalconsolidation.Thestudyhighlightstheroleofinternationalinstitutions,internationalratingagencies,nationalresearchinstitutions,andthemediainstressingtheurgencytoaddressunsustainabledebt.8

Aspoliticalandeconomicshocksarefrequentduringafiscalconsolidation,policymakersalsoneedtoensurethatprogramdesignis

robustbyhavingcontingencyplansinplacetodealwithshocksandmaintainpoliticalsupportforreform.

Finally,strongfiscal

institutions,whichshouldbebuiltearlyonasittakestimetobearfruit,wouldhelppolicymakersmitigate

politicalpressuresby

increasingtransparencyandcredibilityofreformmeasures.Growth

and

Distributional

Impacts

of

FiscalConsolidationsFiscal

consolidations

generally

have

a

negative

short-term

impact

on

economic

activity

relative

to

t