In the wake of the food, fuel and financial shocks, a fourth wave of the global economic crisis began to sweep across developing countries in 2010: fiscal austerity. Serving as an update of earlier research by UNICEF, this working paper:
- examines the latest IMF government spending projections for 128 developing countries, comparing the three periods of 2005-07 (pre-crisis), 2008-09 (crisis phase I: fiscal expansion) and 2010-12 (crisis phase II: fiscal contraction);
- discusses the possible risks for social expenditures;
- assesses the most common adjustment measures being considered by developing countries in 2010-11 and their potentially adverse impacts on vulnerable populations; and
- summarizes a series of alternative policy options that are available to governments to expand fiscal space and ensure a Recovery for All, including children and poor households.