There exist several policies to manage budget deficit; see for example http://www.economicshelp.org/blog/6011/economics/policies-to-reduce-budget-deficit/

The choice of optimal tool depends on economic conditions of a particular country in a certain time period.

You probably know this reference, source of extended debate in 2013, but I pass it on anyway: authors Carmen Reinhart and Kenneth Rogoff, "Financial and Sovereign Debt Crises: Some Lessons Learned ..." ... https://www.imf.org/external/pubs/ft/wp/2013/wp13266.pdf

Not aware of any.

I am attaching one about Israel.

You should also look for papers written by Charles Wyplosz - he analyzes particular countries.

I don´t know any

You may want to look at the literature on non-Keynesian (expansionary) fiscal adjustments. The seminal paper is Giavazzi, F., and Pagano, M. (1990) “Can severe fiscal contraction be expansionary? Tales of two small European countries”, NBER Macroeconomics Annual, 5, 75-111, with several follow-up contributions from Alesina and Ardagna. 

Bear in mind that the literature if very far from having reached a consensus on whether fiscal adjustments can in fact be expansionary, see for example our paper (Macroeconomic effects of fiscal adjustment: A tale of two approaches) which should be available on RG. In particular, whether you find evidence in favor of expansionary effects or not seems to depend crucially on what methodology you use. 

I will check the paper,

you have a good day

I do apologize for the generality I am about to express but considering that IMF "support" is always conditional on "structural adjustment packages", if I were you I would look into IMF policy reports or country reports on the countries having benefitted from IMF loans (Ghana has had more than 5 packages from the Sixties on and the last case in point is Greece).

Even for pure credit reasons, i.e. whether to maintain preferential credit to the country or not, I am sure the IMF has to monitor the policy aspects.

Of course this literature is very much lending/policy focused and not theoretical at all.

Michel  

in Israel Case, according  Adi Brender  Paper was applied a restrictive fiscal policy.

It would seem that a new form of neoliberal nonsense has entered the literature in the form of the idea that austerity measures - budgetary contraction - can have a positive expansionary effect on a depressed economy. As an antidote to dangerous thinking of that sort, I would recommend Mark Blythe's recent study (2013), Austerity: the history of a dangerous idea",  Oxford University Press.

Further point of information for Martha Pantoja:  the studies mentioned (above) by Jan Fidrmuc - those by Giavazzi and Pagano and Alesina and Ardagna - are carefully assessed  by Mark Blyth in his "Austerity" to which I have just drawn attention.

Hello Roy:

I found this paper in the web: Managing Fiscal Deficit in India in 1990s: A Case Study,

Abstract is:

Increasing fiscal deficits is a chronic problem faced by developing countries. Countries like India and other emerging economies are facing the problem of large fiscal deficit and the question is how to manage it so that it would lead to sustainable economic growth. The arguments on the efficacy of the large fiscal deficits are inconclusive with agreement on some basic issues. One of the alarming features of the fiscal deficit in India has been increasing non-plan expenditure in 1980s and 1990s. Huge fiscal deficits have their impact on money supply, inflation and investment. By 1990s there has been a steady growth in debt to GDP ratio. In order to overcome the problem of high fiscal deficit and increasing debt GDP ratio, this paper provides some concrete suggestions and calls for coordination between monetary and fiscal policy.

I think the Indian paper to which you refer has a different focus from the current literature on "austerity"  and fiscal cut-backs: that latter stuff is, on a different tack, seeking to justify deficit reduction as a means of actually stimulating a (developed) economy.                                                                                                                    To say that these "growth through austerity" arguments, are, to put it mildly, questionable is not to cast doubt on the Indian paper's concern with, under the Indian circumstances, a growing deficit. As the Abstract implies the increasing deficit can in that case bring excessive monetary creation, inflation and an increasing burden of debt - not good effects. Therefore there is good reason for the Indian government to try to constrain the growth of the deficit  using appropriate monetary and fiscal measures.                                                                                                                  But in the current  debate about austerity and deficits in the context of advanced country conditions,  the  situation is significantly different. (1) Typically the debt problem  has not been caused by a country "living beyond its means" but reflects the emergency actions taken to rescue the banking system  in 2008 - that was a one-off cause of debt creation (the debt is not due to a continuing structural imbalance); (2) the debt burden - contrary to popular (political) comment, is not a matter of life and death - requiring an immediate  solution - to be achieved through drastic measures.  Debt levels are not unprecedented (cf WW1 andWW2) and, while less debt is no doubt preferable, as requiring less to be spent on interest payments - servicing the present debt is (mostly, I think) not problematic. The  focus on austerity is misguided.  (3) Many observers take the view that the cost of austerity, for the purpose of debt reduction, of cut-backs of necessary social expenditure is (a) far too high and (b) quite unfairly being borne by the poorest members of society; (4) the strategy is not actually working - debt is increasing as economic activity falls. Instead of "austerity" stimulating the economy (as the new classical ideologues  argue it should do) the opposite is happening, recovery is being frustrated and the depression continues.To sum up - in the Indian case, growing debt level is a problem which needs action; in the case of present situations where austerity is being recommended, priorities are wrong: the supposed remedy is more damaging than the deficit.

Thank you Dr. Grieve for your answers and for your positive participation

Saeed, 

Re managing a deficit. I mentioned Mark Blyth's book  as an informed review of the modern literature on "expansionary austerity". I add two other books (of a more popular nature) which examine the recent British experience of dealing with a deficit. These are: "Mr Osborne's Economic Experiment", by William Keegan, published by Searching Finance (2014) and "Austerity: the demolition of the welfare state and the rise of the zombie economy", by Kerry-Anne Mendoza, published by New Internationalist Publications (2015).

Hello Roy:

The firs oil shock 1973-1974 transformed from an engine of government expansion into a process for restraining growth in the public sector. Mexican economy entered 1980´s with their public finances with a large deficit., oil shocks, low growth, high inflation and high unemployment.

" In contrast to many advanced countries, developing countries tend to have lower debt levels, strong growth prospects, high population growth, and large infrastructure gaps. Empirical evidence suggests that the relationship between fiscal adjustment and growth depends on the level of the fiscal deficit. For example, Adam and Bevan (2013) estimate that for developing economies the long-term growth dividend of cutting the deficit disappears or reverses below a threshold of around 1½ percent of GDP. In addition, the magnitude of the dividend depends on how the deficit is financed: Gupta and others (2005) find that reductions in the deficit that translate into significant cuts in domestic financing tend to be

associated with higher growth rates. In Uganda public financial management reforms, including strict expenditure controls, facilitated a reduction in budget deficits and their monetization, which helped lower inflation. Greater macroeconomic stability in turn paved the way for higher growth. IMF POLICY PAPER FISCAL POLICY AND LONG-TERM GROWTH, june 2015, page 7

Hi Martha, Saeed

In talking about deficits and the benefits from reducing these we should, I think, not confuse two different situations. On the one hand, in the case of developing countries, which are paying huge sums in servicing the debts they have built up, much would be gained by achieving a better balance of receipts and expenditures. The outflow of funds in sericing this debt is at the cost of foregoing valuable domestic spending on social welfare and development investment. Whatever can be done to reduce the burden of debt being carried these countries must be beneficial.

On the other hand, there is much discussion presently about the need for "austerity"  in the case of developed economies which, as a result of the 2008 financial crisis, have experienced a great build up of government debt and  deficits. This is quite a different kettle of fish! The orthodox policy response to this perceived problem  to get debt down by drastic austerity measures which aim to reduce deficits and possibly create instead a budgetary surplus.. With these countries, critics of this orthodox policy response fear that that the "remedial"  measures being applied are more damaging than the debt itself.  It is suggested that the debt can be carried without undue difficulty and that the objective should be to reduce it gradually when the economy  in is a healthier state, rather than contract government spending, weakening or preventing recovery, when the economy is still in recession. (The ideas being put about by some neoconservative economists that fiscal contraction can itself help to boost an economy and move it out of recession are, I would say, quite unconvincing.

So, there we have it: (a) for Third World Countries - as in SS Africa - debt reduction is urgent and necessary -  their heavy burden of debt  is driving them further into poverty. By contrast (b) developed countries whose levels of government debt rose significantly as  a result of  rescuing the banks do not face the same difficulties - there is no urgent need to reduce government debt as a first policy priority: what austerity policies are doing is creating poverty and inequality - forcing innocent poorer members of society (by welfare cuts) to pay for the criminal irresponsibility of the bankers who brought the financial system to a desperate state of potential collapse had it not been rescued by emergency government intervention.

You probably know the relevant literature far better than I do but here  a (random)couple of references I came across:

Michael Kline and David Thomas, World Security: Challenge for a New Century, Chapter on "Global Debt and Third World Development", NY, St Martin's Press, 1994.

African Development Bank,"Between Debt and Development". c2010 /12

Hello Roy: Thanks for the book,

Policies to reduce a budget deficit:

1)  Cut government spending

2)  Tax increases

3)  Economic Growth

4) Bailout

5) Default

Martha:  yes, that looks  to be the possibilities -- but, as I think I implied before, there is a need to balance (particularly in the case of advanced countries) the benefits to be gained by reducing the deficit against the costs of the proposed means of doing so. In the UK , poor and vulnerable members of society are being made to pay the price for rescuing the bankers from their greed and incompetence!

After three years, you will have seen quite a few case studies. However, they are just that - case studies. We cannot generalise. So, we should be left asking, what are the conceptual frameworks? What assumptions do the case studies make about the interaction of the state, market and society?

I found this article; the problem is that is not recent:

"Managing Fiscal Deficit in India in 1990s: A Case Study," The IUP Journal of Public Finance, IUP Publications, vol. 0(2), pages 53-63, May.

Hi Martha,

Thank you for alerting me about the case study "Managing Fiscal Deficit in India in 1990s: A Case Study". It is unfortunate that I do not have the access to read it; however, I have requested the case study and once I receive it, I will tell you my opinion.

Thank you again.

Hi Saeed:

I coudn`t download the paper

Managing Fiscal Deficit in India in 1990s: A Case Study; however I share with you this article Fiscal Deficit and its Trends in India, is most recent covers with information to 2016.

Thank you Martha for sending the research paper "Fiscal deficit and its trends in India". The paper traces the major changes in the India’s fiscal policy since 1980-81 through the country’s balance of payments crisis of 1991, the post economic liberalization and high growth period, the introduction of FRBM Act in 2003, adjustment to the global financial crisis of 2008 and the recent post-crisis changes to return to a path of fiscal consolidation.

You´re welcome.

As author say in the last years India, has been more proactive and has udertaken fiscal policy reforms to a steady reduction in fiscal policy as a percentage of Gross Domestic Product. Many countries apply discipline in its fiscal policy, because is very important to mantain mcroeconomic stability.