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The assignment of targets to instruments in developing countries cannot satisfactorily follow any simple universal rule. Which approach is appropriate is influenced by whether the economy is dominated by primary exports, by the importance of the domestic bond market and bank credit, by the extent of existing restriction in foreign exchange and financial markets, by the presence or absence of persistent high inflation, and by the existence or non‐existence of an active international market in the country's currency. Eighteen observations and maxims on stabilisation policy are tentatively drawn (pp. 64–8) from the material reviewed, and the maxims are partly summarised (pp. 69–71) in a schematic assignment, with variations, of targets to instruments.

The World Bank-sponsored public financial management reforms attempt to instil fiscal discipline through techno-managerial packages. Taking Ghana's integrated financial management information system (IFMIS) as a case, this paper explores how and why local actors engaged in counter-conduct against these reforms.

Interviews, observations and documentary analyses on the operationalisation of IFMIS constitute this paper's empirical basis. Theoretically, the paper draws on Foucauldian notions of governmentality and counter-conduct.

Empirics demonstrate how and why politicians and bureaucrats enacted ways of escaping, evading and subverting IFMIS's disciplinary regime. Politicians found the new accounting regime too constraining to their electoral and patronage politics and, therefore, enacted counter-conduct around the notion of political exigencies, creating expansionary fiscal conditions which the World Bank tried to mitigate through IFMIS. Perceiving the new regime as subverting their bureaucratic identity and influence, bureaucrats counter-conducted reforms through questioning, critiquing and rhetorical venting. Notably, the patronage politics of appropriating wealth and power underpins both these political and bureaucratic counter-conducts.

This study contributes to the critical accounting understanding of global public financial management reform failures by offering new empirical and theoretical insights as to how and why politicians and bureaucrats who are supposed to own and implement them nullify the global governmentality intentions of fiscal disciplining through subdued forms of resistance.

A key challenge for hybrid organizations is managing to recombine the different institutional logics they incorporate while navigating complex, fast-changing environments. To examine how hybrids address this issue, the authors analyze the evolution of the Italian fiscal police – the Guardia di Finanza – from its foundation in 1862. Building on this unique case of a fiscal law enforcement agency that incorporates public fiscal and military logics, the authors propose that hybrid organizations can integrate the different logics they incorporate on the basis of four mechanisms. The mechanisms of upward and downward vertical integration trigger the integration of different logics throughout the entire organization. Integrated horizontal task extension and integrated horizontal competency extension enable an organization to manage a broader range of tasks while it develops the competencies that environmental complexity demands. These four mechanisms interact and, when properly managed, reinforce each other. With this chapter, the authors contribute to research on the processual nature of organizational hybridity and to broader research on the role of structures and competencies in dealing with environmental complexity.

Although the Chinese economy has experienced a strong and rapid growth due to the success of its economic reform, the Chinese central government faces a stern fiscal decline. The fiscal problem has undermined the ability of the central government in completing many crucial governing tasks. By examining the institutional root of the fiscal problem, this paper argues that the fiscal decline is part of the ironic corollary of the decentralization strategy of China’s economic reform which produces a “weak center, strong local” outcome. To fully address the problem, China should undertake major institutional reforms to redefine as well as institutionalize the fiscal roles of different levels of government.

Unanticipated economic fluctuations exert pressure on state governments to conduct discretionary tax adjustments to balance the budget. Even though states adjust fiscal policy as the economy fluctuates, the typical cyclical economic factors are not the sole determinant of such adjustments. State government budgeting systems in the United States operate under a variety of fiscal constraints. The tax and expenditure limit (TEL) is a prominent fiscal constraint in state governments. Using a panel dataset covering 47 continental state governments from FY 1988 to FY 2006, this paper examines the impact of TELs on state discretionary tax adjustments. Results from this analysis shows that states with stringent TELs tend to conduct fewer tax cuts when facing potential deficits.

This paper aims to estimate a New Keynesian small open economy dynamic stochastic general equilibrium (DSGE) model for Egypt using Bayesian techniques and data for the period FY2004/2005:Q1-FY2015/2016:Q4 to assess monetary and fiscal policy interactions and their impact on economic stabilization. Outcomes of monetary and fiscal authority commitment to policy instruments, interest rate, government spending and taxes, are evaluated using Taylor-type and optimal simple rules.

The study extends the stylized micro-founded small open economy New Keynesian DSGE model, proposed by Lubik and Schorfheide (2007), by explicitly introducing fiscal policy behavior into the model (Fragetta and Kirsanova, 2010 and Çebi, 2011). The model is calibrated using quarterly data for Egypt on key macroeconomic variables during FY2004/2005:Q1-FY2015/2016:Q4; and Bayesian methods are used in estimation.

The results show that monetary and fiscal policy instruments in Egypt contribute to economic stability through their effects on inflation, output and debt stock. The monetary policy Taylor rule estimates reveal that the Central Bank of Egypt (CBE) attaches significant importance to anti-inflationary policy and (to a lesser extent) to output targeting but responds weakly to nominal exchange rate variations. CBE decisions are significantly influenced by interest rate smoothing. Egyptian fiscal policy has an important role in output and government debt stabilization. Additionally, the fiscal authority chooses pro-cyclical government spending and counter-cyclical tax policies for output stabilization. Again, past values of the fiscal instruments are influential in the evolution of the future fiscal policy-making process.

A few studies have examined the interaction between monetary and fiscal policy in Egypt within a unified framework. The presented paper integrates the monetary and fiscal policy analysis within a unified dynamic general equilibrium open economy rational expectations framework. Without such a framework, it would not be easy to jointly analyze monetary and fiscal transmission mechanisms for output, inflation and debt. Also, it would be neither possible to contrast the outcome of monetary and fiscal authorities commitment to a simple Taylor instrument rule vis-à-vis optimal policy outcomes nor to assess the behavior of monetary and fiscal agents in macroeconomic stability in context of an active/passive policy decisions framework.

Departing from the expansionary austerity literature, this study aims at examining how fiscal consolidation affects the economic growth in Tunisia using annual data over the period 1970–2018.

To revisit the fiscal consolidation-economic growth nexus, the ambiguous empirical findings in previous literature make useful the adoption of alternative econometric techniques. The authors use an extended nonlinear autoregressive distributed lag (ARDL) cointegration approach developed by Shin et al. (2014) and the Diks and Panchenko's (2006) nonlinear Granger causality test. Furthermore, a traditional approach based on changes in cyclically-adjusted primary balance was applied to define the fiscal consolidation episodes in Tunisia.

The empirical evidence reveal that fiscal adjustment in Tunisia may hurt the economy, both in the short- and long-run, through its contractionary effect on economic growth. Another important finding concerns the unidirectional nonlinear Granger causality running from fiscal consolidation to economic growth.

Fiscal adjustment in Tunisia is found to play a prominent role in reducing public debt; but at the same time, it may be costly and not beneficial to the economy. This view corroborates with the fact that fiscal consolidation is more likely to end successfully only under specific conditions. This calls for a deeper reflection upon new insights regarding the design of fiscal adjustment in Tunisia. To reach this end, it is suggested to combine the defensive consolidation strategy with offensive components such as investment, infrastructure, education and health.

The existing economic analysis on fiscal policy-growth nexus in Tunisia has often identified fiscal consolidation through the use of the actual fiscal balance. With the goal of more accurate estimation, this study bridges the gap by using the cyclically-adjusted primary balance (CAPB) as a much suitable indicator to investigate the non-Keynesian effect of fiscal consolidation in Tunisia. This indicator eliminates the influence of cyclical fluctuations and many other fixed expenditures such as the interest paid on the public debt.

This study aims to research the effects of unemployment wages current account and consumer price index (CPI) on the real gross domestic product (RGDP), which, in the optimum currency area (OCA) theory, supposes that countries with higher factor mobility can significantly profit from the currency area. However, in this study, it is shown that the considered optimum currency crisis (OCC) model is affected by mobility factors, as the defined theory has not been perfectly realised in the Eurozone.

In this study, Breusch–Pagan–Godfrey and Lagrange multiplier (LM) tests are used for supporting the survey for better estimation of the panel cointegration tests, where Pedroni's (1995, 1997) technique is used. The unit root tests are employed, of which the Phillip–Perron and augmented Dickey–Fuller tests (unit root test, Dickey, D. and W. Fuller, 1979) are considered.

It can be concluded that demand shocks will tend to be more asymmetric instead of being symmetric, even though they are in the customs union (CU). However, Polish workers in a given scenario may move to Germany, but because of the rigidity of the labour market and qualification differences between workers, the interregional integration of member countries is reduced, and this reduces the absorption of asymmetric shocks. In Germany, where strong employment protection and rigidity are observed in comparison to Poland, although there has been historical migration and economical collaboration, unfortunately, the integration of the two countries’ economies has not been realised.

Quantitative research on fiscal union and the estimation of its effects is not possible because there is no practical experience of fiscal union throughout the European Union (EU). However, quantitative research is used for estimating the effects of OCA in the Eurozone. Quantitative investigation is particularly focused on the monetary union and single currency and its impact on growth rate. In this study, the ordinary least squares (OLS) method and panel cointegration test are employed for estimating the effects of the considered variables.

The Eurozone and the application of a single currency throughout the EU was a considerably difficult task. In addition, the adoption of a single currency was not easy for those member countries that fulfilled the “convergence criteria” (or “Maastricht criteria”) and who joined the Eurozone, because only adoption is not enough; maintenance of those criteria is also required. This study analysed the application of the Eurozone in the light of the OCA of Mundel's theory.

The OCA is important for member countries’ economic relations. However, the application of a single currency is not easy and needs to be controlled and regulated to ensure best practises throughout the Eurozone. Monetary integration is not a simple process, and Eurozone countries’ financial difficulties affect each other’s markets’ indifferent aspects. Particularly in any market recession, demand shocks tend to have different effects. Furthermore, in comparison to the monetary union, the CU has a considerable impact on trade enlargement.

In this study, the effects of the independent variables “wages, unemployment, CPI and capital flow” on the dependent variable “RGDP” is considered, which, in the OCA theory, supposes that countries with higher factor mobility can significantly profit from the currency area. In application, it was turned into crisis because of inadequate monetary and fiscal application. In this paper OCA is questioned in the light of the Eurozone for bringing better understanding to these difficulties. The considered model and estimations are used for evaluating to create sustainable monetary integration for economic growth.

This paper analyses the economic liberalization process in India that started in 1991. The focus of this paper is primarily on the sequencing of the opening up process and the importance of keeping the fiscal deficit under control. The paper argues that if a reforming economy is exposed to financial flows in the early stage of the reform process it will face either the risk of high inflation (under a fixed exchange rate) or the appreciation of the real exchange rate and the worsening trade balance (under a flexible exchange rate). The paper compares the reform process in India, Argentina and Chile, and concludes that the reform failed in Argentina and not in Chile, because Argentina opened up the real and financial sectors simultaneously and failed to control the fiscal deficit. Evidence from India suggests that India followed the right sequence with a substantial control over capital flows but had very high levels of fiscal deficit.