Emerging Economies Thrive with Back-Loaded Fiscal Cuts and Revenue Reforms
The study looked at how emerging market economies can successfully make fiscal adjustments. They found that big and back-loaded cuts in spending are most effective. Cutting expenses alone isn't enough; countries also need to reform their revenue systems. Governments with strong parliamentary support and no upcoming elections tend to have more success with fiscal adjustments. And when countries have support from the IMF, their adjustments are more likely to work.