This paper analyzes the decision of a government facing electoral uncertainty to implement structural reforms in the presence of fiscal restraints similar to the Stability and Growth Pact. The model shows that a pact may harm structural reforms, sacrificing future growth for present stability. The welfare gains brought about by a pact depend on a trade-off between the reduction in the deficit bias and the induced reduction in the amount of structural reform. A pact becomes more attractive (“smarter”) if it takes into account the fiscal impact of structural reforms, in line with a recent proposal by the European Commission.

The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.

This paper tests uncovered interest parity (UIP) using interest rates on longer maturity bonds for the Group of Seven countries. These long-horizon regressions yield much more support for UIP—all of the coefficients on interest differentials are of the correct sign, and almost all are closer to the UIP value of unity than to zero. The paper also analyzes the decision by a government facing electoral uncertainty to implement structural reforms in the presence of fiscal restraints similar to the Stability and Growth Pact.

Employers demand more of employees’ time while leaving the important things in life—health, family—for workers to take care of on their own time and dime. How can workers get ahead while making sure their families don’t fall behind? Heather Boushey shows in detail that economic efficiency and equity do not have to be enemies.

How does a newly democratized nation constructively address the past to move from a divided history to a shared future? How do people rebuild coexistence after violence? The International IDEA Handbook on Reconciliation after Violent Conflict presents a range of tools that can be, and have been, employed in the design and implementation of reconciliation processes. Most of them draw on the experience of people grappling with the problems of past violence and injustice. There is no "right answer" to the challenge of reconciliation, and so the Handbook prescribes no single approach. Instead, it presents the options and methods, with their strengths and weaknesses evaluated, so that practitioners and policy-makers can adopt or adapt them, as best suits each specific context. Also available in a French language version.