Fiscal Policy Coordination in the Waemu After the Devaluation

February 1, 1995

Preview Citation

Format: Chicago

Christoph B. Rosenberg Fiscal Policy Coordination in the Waemu After the Devaluation, (USA: International Monetary Fund, 1995) accessed December 25, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the economic implications of fiscal policy coordination in the West African Economic and Monetary Union (WAEMU) in the light of the January 1994 devaluation of the CFA franc. Diverging tax, tariff, and budgetary politics are identified and it is argued that the resulting fiscal externalities have prevented the zone from reaping the full benefits of a monetary union. The paper shows that the devaluation makes it more desirable than ever to have a closer policy coordination to prevent such detrimental fiscal externalities. Recent efforts in this field are reviewed and evaluated. Finally, the paper offers some recommendations with respect to the optimal design of tax and tariff rate structures, and the choice of budgetary convergence criteria.

Subject: Consumption taxes, Excises, Fiscal policy, Tariffs, Taxes, Value-added tax

Keywords: CFA franc, Consumption taxes, Deficit countries vis-à-vis zone country, Distortionary rate differentiation, Effective tariff rate, Excise rate, Excises, Fiscal externality, Import VAT, Rate level, Rate structure, Tariff rate, Tariff system, Tariffs, Value-added tax, VAT rate, VAT system, WAEMU economy, WAEMU imports, WAEMU partner country Togo, West Africa, WP, Zone country

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1995/025
Stock No:

WPIEA0251995
ISBN:

9781451844207
ISSN:

1018-5941

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