Working Papers

Fiscal Sustainability: Issues for Emerging Market Countries

Publication Number: ECESWP91-E

December, 2003

Author : Alejandro Izquierdo and Ugo Panizza

Type : Working Papers

This paper surveys the recent literature on fiscal sustainability with particular focus on emerging market countries. It discusses the main elements that differentiate emerging market countries from industrial countries and then discusses how probabilistic models can help to evaluate fiscal sustainability in an uncertain environment. Based on this discussion, the paper uses Egypt to illustrate an application of the probabilistic model and to evaluate the impact of shocks to current account financing on sustainability.