To Cut or Not To Cut: Does the Caribbean Follow the Advice of Multilaterals?
Mercer-Blackman, Valerie; Seerattan, Dave
This policy brief defines the challenges of conducting appropriate fiscal policy over the past 20 years in four Caribbean countries (The Bahamas, Barbados, Suriname, and Trinidad and Tobago) and reviews international financial institutions' technical assistance and advice on tax and expenditures policies. The review finds that national authorities usually agree with the policy recommendations of the international financial institutions in most areas but disagree with the pace and scale of policy implementation. Moreover, delays in implementing required policy action at a suitable pace in many instances may have contributed to a pro-cyclical fiscal stance and worsened the region's fiscal accounts. In future designs of technical assistance, some Caribbean-specific features need to be taken into account. The authors analyze current conditions and provide viable recommendations.