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IMF/World Bank Conference on

Rules-Based Fiscal Policy in Emerging Market Economies

Oaxaca, Mexico, February 14-16, 2002

Preliminary Program

Thursday, February 14

8:00 – 10:00 p.m. / Inaugural Dinner
Introduction: Teresa Ter-Minassian (IMF) /Guillermo Perry (WB)
Speaker: Francisco Gil Diaz (Secretary of Finance, Mexico)

Friday, February 15

9:00 – 11:20 a.m.
[25 min. each]
[15 min. each]
[20 minutes] / Session 1: Political Economy and Macroeconomic Setting
Main issues: Arguments for/against rules-based vs. discretionary fiscal policies in emerging markets. Policymaking in a democratic environment; implications of electoral cycles and descentralization. Macroeconomic trends and volatility (incl. dependence on private capital inflows, primary product exports) and fiscal policy response: procyclical stance, deficit bias, fiscal sustainability problems, burden on monetary policy.
Chair: Guillermo Perry (WB)
Speakers: Allan Drazen (Maryland Univ., Tel Aviv Univ.)
(Political economy issues)
Ricardo Hausmann (Harvard University)
(Macroeconomic trends and fiscal institutions)
George Kopits (IMF)
(Fiscal policy under high capital mobility)
Discussants:Andres Conesa (Director General, SHCP, Mexico)
Mario Blejer (Vicepresident, Banco Central, Argentina)
Mario Marcel (Budget Director, Min. Fin., Chile)
Questions and answers
11:20 – 11:40 p.m. / Coffee break
11:40 – 2:00 p.m.
[25 min. each]
[15 min. each]
[20 minutes] / Session 2: Design of Rules at the National Level
Main issues: Choice of rules (balanced budget, expenditure limits, debt limits, etc.), definitions, coverage (incl. linkages with social security). Escape clauses or contingency funds, in the face of cyclical fluctuations and shocks. Mix of fiscal and monetary rules. Scope for rules-based international fiscal coordination (Mercosur, Comunidad Andina). Country experience.
Chair: Owen Arthur (Prime Minister, Barbados)
Speakers:Eduardo Guardia (Dep. Treasurer, Brazil)
(Experience of Brazil)
Marco Buti (European Commission)
(Lessons from EMU/SGP)
Olav Bjerkholt (University of Oslo )
(Fiscal rules for economies with nonrenewable resources)
Discussants: Moises Schwartz (Director General, SHCP, Mexico)
Irene Niculescu (Director, OPAM, Venezuela)
Pablo Guidotti (Director, Di Tella University)
Questions and answers
2:00 – 4:00 p.m. / Lunch
4:00 – 6:20 p.m.
[25 min. each]
[15 min. each]
[20 minutes] / Session 3: Design of Rules for the Subnational Level
Chair: Teresa Ter-Minassian (IMF)
Main issues: Choice of subnational rules (or contribution to general government-level rules), incl. administrative vs. market-based constraints. Escape clauses and/or intergovernmental transfers, to accommodate asymmetric shocks. Vertical balance between assigned revenue sources and expenditure responsibilities, regional equalization mechanism, incentives for free-rider behavior, anticipation of bailouts. Country experience.
Speakers:Mariano Tommasi (University of San Andres)
(Latin American experience)
Daniele Franco (Bank of Italy)
(Lessons from EMU/internal pacts)
Steven Webb (WB)
(Fiscal rules and descentralization)
Discussants:Fernando Elizondo Barragan (Sec. of Fin., Nuevo Leon)
Fernando Dall’Acqua (Sec. of Finance, Sao Paulo)
Paul Boothe (University of Alberta)
Questions and answers

Saturday, February 16

9:00 – 11:20 a.m.
[25 min. each]
[15 min. each]
[20 minutes] / Session 4: Implementation of Fiscal Rules
Main issues: Preparation and convergence path. Institutional context and statutory basis (legislation, constitution, or policy guidelines). Budget process, incl. multiyear framework. Reporting requirements, accounting conventions. Surveillance and procedural issues. Sanctions for noncompliance. Role of legislature, courts, audit office (or comptroller general) in monitoring, arbitration, and enforcement. Country experience.
Chair: Juan Jose Daboub (Finance Minister, El Salvador)
Speakers:Allen Schick (Brookings Institution)
(Budget process, institutional issues)
Jaime Sánchez Revenga (Budget Director, Spain)
(Lessons from EMU/Spain)
J. Craig/A. Manoel (IMF)
(Latin American and Anglo-Saxon experience)
Discussants:Carlos Hurtado (Undersecretary of Finance, Mexico)
Joaquin Vial (Harvard University)
Humberto Petrei (Consultant, Prov. of Cordoba)
Questions and answers
11:20 – 11:40 p.m. / Coffee break
11:40 – 1:40 p.m. / Closing Panel: Policy in Practice and Political Perspectives
Moderator:Eduardo Aninat (Deputy MD, IMF)
Panelists:Pedro Pablo Kuczynski (Finance Minister, Peru)
Pedro Parente (Minister of the Presidency, Brazil) Juan Manuel Santos (Finance Minister, Colombia)
Agustin Carstens (Undersecretary of Finance, Mexico) John Taylor (Undersecretary of the Treasury, U.S.)
2:00 – 4:00 p.m. / Closing Lunch
Introduction: Claudio Loser (IMF)
Speaker: Nicholas Stern (Sr. VP, Chief Economist, WB)