The effectiveness of the fiscal discipline policy according to the International Monetary Fund’s approach in selected rentier economies

A Thesis submitted by the student
Safaa Hussein Mahmoud Ali Al-Tamimi

To the Council of the College of Administration and Economics – University of Karbala in fulfillment of the requirements for the Master’s .degree in Economics

Supervision by
Prof. Dr. Hashem Marzooq Ali Al-Shammari

Abstract:

Most countries have tried to rely on the reform programs of the International Monetary Fund, hoping that they will achieve positive economic results due to the absence of a strategic economic planning that can absorb shocks and internal and global economic transformations. These countries have been exposed to many economic problems. Represented by large deficits and financial crises, in addition to the debts with which it finances its deficit for the budgets that the economy is exposed to almost continuously, that financial discipline is very important for rentier economies because it has a close relationship with the economic difficulties and crises that the rentier economy is exposed to, The study attempts to get acquainted with the indicators of financial rules and the extent of their discipline, and focus on analyzing the impact of financial discipline on some economic variables, which shows the ability of economic programs to control public expenditures and public revenues in light of the constant fluctuations in pricesThe research stems from the hypothesis that the programs of the International Monetary Fund have positive effects that lead to achieving financial discipline in the sample countries by adjusting the financial rules, and the important positive repercussions on the macroeconomy. The research has focused on showing the policy of fund programs in achieving discipline Financial for the period (2004_2020) for the experiences of the sample countries, the UAE went through the experience of applying programs to achieve discipline and succeeded in controlling the budget, to find out the most important procedures followed and to benefit from them in how to implement the International Monetary Fund programs to achieve financial discipline in Iraq, as it was relied on The descriptive analytical method is inductive and deductive. The research concludes that commitment to financial discipline programs has positive effects that contribute to making adjustments to financial rules, the most important of which is reducing the phenomenon of financial and administrative corruption, diversifying sources of public revenues and working on a disciplined financial policy, which will be reflected in economic stability. The study also reached the most important conclusions, namely that the rate of public debt is associated with a direct relationship with the budget deficit, which leads to an increase in the deficit in the event of a rise, and this negatively affects the achievement of financial discipline in (Iraq and Tunisia), which indicates that public debt does not contribute to increasing production Or investment, unlike the UAE. Religion contributes to increasing production and investment. Among the recommendations is the need to monitor public debt in the sample countries, provided that it does not exceed the specified percentage (60%), and work to link public debt to achieving financial sustainability through investment projects .

Keywords: fiscal discipline, budget deficit, economic variables, International Monetary Fund program