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Cyclical fiscal policy in Africa

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  • Carmignani, Fabrizio

Abstract

This paper studies the role of fiscal policy for stabilization in African countries. Two empirical regularities are documented for the group of African economies. First, fiscal policy generally has Keynesian effects. Second, fiscal policy instruments are often pro-cyclical (and practically never counter-cyclical). Taken together these two empirical regularities indicate a major policy failure as they imply that fiscal policy is a cause of volatility and not a tool for stabilization. The paper then discusses policy options to make fiscal policy more conducive to stabilization.

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Bibliographic Info

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

Volume (Year): 32 (2010)
Issue (Month): 2 (March)
Pages: 254-267

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Handle: RePEc:eee:jpolmo:v:32:y::i:2:p:254-267

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

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Keywords: Business cycles Fiscal policy Output growth volatility Stabilization;

References

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Citations

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Cited by:
  1. Cheikh Tidiane Ndiaye & Mamadou Abdoulaye Konte, 2012. "Politiques macroéconomiques et stabilisation des chocs dans la zone UEMOA," Working Papers halshs-00830595, HAL.
  2. Leibfritz, Willi & Rottmann, Horst, 2013. "Fiscal policy during business cycles in developing countries: The case of Africa," OTH im Dialog: Weidener Diskussionspapiere 36, University of Applied Sciences Amberg-Weiden (OTH).
  3. Victor Duarte Lledo & Marcos Poplawski-Ribeiro, 2011. "Fiscal Policy Implementation in Sub-Saharan Africa," IMF Working Papers 11/172, International Monetary Fund.
  4. Samuel Bates & Cheikh Tidiane Ndiaye, 2014. "Economic Growth from a Structural Unobserved Component Modeling: The Case of Senegal," Economics Bulletin, AccessEcon, vol. 34(2), pages 951-965.
  5. Kester Guy & Anton Belgrave, 2012. "Fiscal Multiplier in Microstates: Evidence from the Caribbean," International Advances in Economic Research, Springer, vol. 18(1), pages 74-86, February.
  6. International Monetary Fund, 2011. "The Cyclicality of Fiscal Policies in the CEMAC Region," IMF Working Papers 11/205, International Monetary Fund.
  7. Alagidede, Paul & Coleman, Simeon & Cuestas, Juan Carlos, 2012. "Inflationary shocks and common economic trends: Implications for West African monetary union membership," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 460-475.

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