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Fiscal policy pro-cyclicality in Sub-Saharan African countries: The role of export concentration

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  • Ouedraogo, Rasmane
  • Sourouema, Windemanegda Sandrine

Abstract

Sub-Saharan Africa's exports remain dominated by primary commodities, and the need to diversify their production and export base appears as a matter of urgency. This paper investigates the impact of exports concentration on fiscal pro-cyclicality in sub-Saharan Africa. The concentration of exports limits the sources of revenues for governments and restrains the fiscal room for maneuver. Using a sample of 40 countries over the period 1995–2015, we find that export concentration increases the degree of fiscal policy pro-cyclicality, and this result is driven by the behavior of public investment. Our findings highlight the importance of diversifying exports in order to widen the range of revenue sources for governments and pave the way of countercyclical public investment capable of generating sustainable growth.

Suggested Citation

  • Ouedraogo, Rasmane & Sourouema, Windemanegda Sandrine, 2018. "Fiscal policy pro-cyclicality in Sub-Saharan African countries: The role of export concentration," Economic Modelling, Elsevier, vol. 74(C), pages 219-229.
    • Handle: RePEc:eee:ecmode:v:74:y:2018:i:c:p:219-229
    DOI: 10.1016/j.econmod.2018.05.017
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    2. Heimberger, Philipp, 2023. "The cyclical behaviour of fiscal policy: A meta-analysis," Economic Modelling, Elsevier, vol. 123(C).
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    4. Dervis Kirikkaleli & Ibrahim Adeshola & Tomiwa Sunday Adebayo & Abraham Ayobamiji Awosusi, 2021. "Do foreign aid triggers economic growth in Chad? A time series analysis," Future Business Journal, Springer, vol. 7(1), pages 1-17, December.
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    8. Parteka, Aleksandra, 2020. "What drives cross-country differences in export variety? A bilateral panel approach," Economic Modelling, Elsevier, vol. 92(C), pages 48-56.

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    More about this item

    Keywords

    Fiscal policy; Exports concentration; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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