IDEAS home Printed from
   My bibliography  Save this article

Public Spending And Real Exchange Rate Instabilities And Growth In Africa: Evidence From Panel Data


  • Oumar Diallo

    () (United Nations)


The paper investigates the causes of Africa¡¯s poor growth performance. It therefore focuses on the strand of literature that highlights the role of policy instability and uses the dependent economy model as the main theoretical framework. Results from the empirical work indicate that public spending instability increases real exchange rate instability, which in turn exerts a negative impact on both investment and total factor productivity. Further, the empirical investigation suggests partially that real exchange rate appreciation contributes to the decline of sectors with important positive externalities, thereby leading to persistent productivity losses and weak economic growth.

Suggested Citation

  • Oumar Diallo, 2007. "Public Spending And Real Exchange Rate Instabilities And Growth In Africa: Evidence From Panel Data," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 32(2), pages 69-92, December.
  • Handle: RePEc:jed:journl:v:32:y:2007:i:2:p:69-92

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Jean–paul Azam & Augustin Fosu & Njuguna Ndung’u, 2002. "Explaining Slow Growth in Africa," African Development Review, African Development Bank, vol. 14(2), pages 177-220.
    2. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    3. Hnatkovska, Viktoria & Loayza, Norman, 2004. "Volatility and growth," Policy Research Working Paper Series 3184, The World Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Africa; Economic Growth; Macroeconomic Policy; Panel Data;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:32:y:2007:i:2:p:69-92. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sung Y. Park). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.