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The Quality Of Budgetary Institutions In Africa: Exploring The Drivers

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  • Adedeji Adeniran
  • Mma Amara Ekeruche
  • Chimere O. Iheonu

Abstract

This paper examines the economic and political determinants of the observed variations in the quality of budgetary institutions in 31 selected African countries from 2005 to 2017. The quality of budgetary institutions is measured using the World Bank’s Country Policy and Institution Assessment score. The empirical analysis utilises Ordinary Least Squares, two-stage least squares, two-step generalized method of moment, and the random effects probit and mixed effects models. The most significant and robust determinants of budgetary institution quality were found to be the level of external debt, foreign aid, the extent of control of corruption, and the level of voice and accountability. The results also reveal that foreign aid, control of corruption, and voice/accountability increase the probability of an improved quality of budgetary institutions. These findings resonate with the broader discussion on the role of political will and the need for the preferences of domestic actors to be aligned in order to deliver institutional reform in Africa.

Suggested Citation

  • Adedeji Adeniran & Mma Amara Ekeruche & Chimere O. Iheonu, 2022. "The Quality Of Budgetary Institutions In Africa: Exploring The Drivers," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(232), pages 127-152, January –.
    • Handle: RePEc:beo:journl:v:67:y:2022:i:232:p:127-152
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    More about this item

    Keywords

    budgetary institution; crisis hypothesis; common pool problem; fiscal performance; Africa;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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