Financial Analytics: Science and Experience

Abstracting and Indexing

Referativny Zhurnal VINITI RAS
Google Scholar

Online available



Cyberleninka (12 month OA embargo)

Fiscal consolidation: global practices

Vol. 9, Iss. 27, JULY 2016

PDF  Article PDF Version

Received: 21 June 2016

Received in revised form: 30 June 2016

Accepted: 7 July 2016

Available online: 28 July 2016

Subject Heading: Economic policy

JEL Classification: E20, E60, E62, E66

Pages: 51-62

Shvandar K.V. Financial Research Institute, Moscow, Russian Federation

Anisimova A.A. Financial Research Institute, Moscow, Russian Federation

Importance Many developed nations have been changing their spending and taxation policies for recent two decades. They do it as they need to fund budget deficits that are increasing due to growing governmental spending on various governmental programs. Debt crises stemmed from such policies of developed economies. Considering the existing situation, the countries opted for fiscal consolidation.
Objectives The research analyzes the fiscal consolidation process in global practices, and overviews its basic reasons.
Methods In the first part of our research, we set forth theoretical aspects of fiscal consolidation, its basic strategies in global practices, depending on the economic situation. The second part is dedicated to countries, which completed fiscal consolidation, and analyzes measures of fiscal consolidation, and additional reforms.
Results Upon the analysis of fiscal consolidation evidence from global practices, we found the principal goal of fiscal consolidation, necessary factors for long-term positive effect of fiscal reforms and economic growth, and basic difficulties the countries face during fiscal consolidation.
Conclusions and Relevance Fiscal consolidation basically pursues reducing budget deficit and government debt. Supplemental reforms should be conducted to reach the maximum positive effect of fiscal reforms, and economic growth in the long run. As the analysis of fiscal consolidation shows, it is difficult to preserve positive results of the reforms within a long-term period.

Keywords: fiscal consolidation, reforms, tax proceeds, budget deficit, government debt


  1. Var'yash I.Yu., Shvandar K.V., Burova T.F. [Updating macroeconomic forecasts in the budgetary process]. Nauchno-issledovatel’skii finansovyi institute. Finansovyi zhurnal = Financial Research Institute. Financial Journal, 2014, no. 4, pp. 118–128. (In Russ.)
  2. Erceg C.J., Lindé J. Fiscal Consolidation in an Open Economy. American Economic Review, 2012, vol. 102, iss. 3, pp. 186–191.
  3. Caporale G.M., Chui M., Hall S.G., Henry B. Fiscal Consolidation: An Exercise in the Methodology of Coordination. Journal of Economic Integration, 2005, vol. 20, iss. 1, pp. 1–25.
  4. Hougaard Jensen S.E., Rutherford T.F. Distributional Effects of Fiscal Consolidation. The Scandinavian Journal of Economics, 2002, vol. 104, iss. 3, pp. 471–493.
  5. Shvandar K.V., Plotnikov S.V., Borodin A.D. [Modeling capabilities as part of forecasting the conditions in global commodity markets: evidence from the oil market]. Dengi i kredit = Money and Credit, 2010, no. 4, pp. 63–69. (In Russ.)
  6. Neaime S. Sustainability of Budget Deficits and Public Debts in Selected European Union Countries. The Journal of Economic Asymmetries, 2015, vol. 12, iss. 1, pp. 1–21.
  7. Neaime S. Sustainability of MENA Public Debt and the Macroeconomic Implications of the U.S. Financial Crisis. Middle East Development Journal, 2010, vol. 2, iss. 2, pp. 177–201.
  8. Neaime S. The Global Financial Crisis and the Euro Mediterranean Partnership. In: Europe and the Mediterranean Economy. London School of Economics and Routledge Press, 2012, pp. 116–131.
  9. Neaime S. The Global Financial Crisis, Financial Linkages and Correlations in Returns and Volatilities in Emerging MENA Stock Markets. Emerging Markets Review, 2012, vol. 13, iss. 3, pp. 268–282.
  10. Cutler D.M. Tax Reform and the Stock Market: An Asset Price Approach. The American Economic Review, 1988, vol. 78, iss. 5, pp. 1107–1117. Available at: Link.
  11. Auerbach A.J., Gale W.G., Harris B.H. Activist Fiscal Policy. Journal of Economic Perspectives, 2010, vol. 24, iss. 4, pp. 141–164.
  12. Alesina A., Ardagna S., Gali J. Tales of Fiscal Contractions. Economic Policy, 1998, vol. 13, iss. 27, pp. 487–545.
  13. Larch M., Turrini A. Received Wisdom and Beyond: Lessons from Fiscal Consolidation in the EU. Brussels, European Commission, 2011.
  14. Alesina A., Carloni D., Lecce G. The Electoral Consequences of Large Fiscal Adjustments. NBER Working Paper, 2012, no. 17655.
  15. Guichard S. et al. What Promotes Fiscal Consolidation: OECD Country Experiences. OECD Economics Department Working Papers, 2007, no. 553.
  16. Anisimova A.A. [Strategic budgetary planning: Norwegian and Swedish expertise]. Finansy = Finance, 2015, no. 5, pp. 72–80. (In Russ.)
  17. Malis N.I. [Tax policies for countering the shadow economy: tax collectability increase]. Nauchno-issledovatel’skii finansovyi institute. Finansovyi zhurnal = Financial Research Institute. Financial Journal, 2014, no. 1, pp. 81–90. (In Russ.)
  18. Shvandar K.V., Anisimova A.A. [Foreign experience in the cashless payment system development: practices and results]. Nauchno-issledovatel’skii finansovyi institute. Finansovyi zhurnal = Financial Research Institute. Financial Journal, 2015, no. 1, pp. 91–98. (In Russ.)
  19. Schneider F., Buehn A., Montenegro C. Shadow Economies All over the World. New Estimates for 162 Countries from 1999 to 2007. Policy Research Working Paper, 2010, no. 5356. Available at: Link.
  20. Rother P., Schuknecht L., Stark J. The Benefits of Fiscal Consolidation in Uncharted Waters. European Central Bank. Occasional Paper Series, 2010, no. 121. Available at: Link.

View all articles of issue


ISSN 2311-8768 (Online)
ISSN 2073-4484 (Print)

Journal current issue

Vol. 12, Iss. 3
September 2019