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Tortuous road toward countercyclical fiscal policy: Lessons from democratized sub-Saharan Africa

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  • Diallo, Oumar
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    Abstract

    Many African countries experienced significant political transformations in the early 1990s, moving from one-party systems to multipartite regimes. In line with the literature that links policy choices to political regimes, the paper explores the implications of such changes on the cyclical properties of fiscal policy. The paper uncovers a positive association between democratic institutions and countercyclical fiscal policies in a panel of African countries. More importantly, formal institutions that impose restraints on the executive branch are found to be the key factor that explains why democracies can better smooth business cycles than autocracies.

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    File URL: http://www.sciencedirect.com/science/article/B6V82-4S4JYK8-4/2/f247bb87279c78903acfd01bc30e37fd
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Policy Modeling.

    Volume (Year): 31 (2009)
    Issue (Month): 1 ()
    Pages: 36-50

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    Handle: RePEc:eee:jpolmo:v:31:y:2009:i:1:p:36-50

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    Web page: http://www.elsevier.com/locate/inca/505735

    Related research

    Keywords: Business cycles Fiscal policy Political economy Panel data;

    References

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    Cited by:
    1. Sophia Gollwitzer & Eteri Kvintradze & Tej Prakash & Luis-Felipe Zanna & Era Dabla-Norris & Richard Allen & Irene Yackovlev & Victor Duarte Lledo, 2010. "Budget Institutions and Fiscal Performance in Low-Income Countries," IMF Working Papers 10/80, International Monetary Fund.
    2. Irene Yackovlev & Victor Duarte Lledo & Lucie Gadenne, 2009. "Cyclical Patterns of Government Expenditures in Sub-Saharan Africa: Facts and Factors," IMF Working Papers 09/274, International Monetary Fund.
    3. Carmignani, Fabrizio, 2010. "Cyclical fiscal policy in Africa," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 254-267, March.
    4. Yuan-Hong Ho & Chiung-Ju Huang, 2013. "Presidential Election, Checks and Balances, and Allocation of Public Expenditures in Taiwan," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 9(1), pages 31-53, January.
    5. Marius Ikpe & Alwell Nteegah, 2013. "Value Added Tax and price stability in Nigeria: A partial equilibrium analysis," European Journal of Government and Economics, Europa Grande, vol. 2(2), pages 137-147, December.
    6. Ahmad, A.H. & Pentecost, Eric J., 2012. "Identifying aggregate supply and demand shocks in small open economies: Empirical evidence from African countries," International Review of Economics & Finance, Elsevier, vol. 21(1), pages 272-291.

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