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The Causality between Revenues and Expenditure of the Federal and Provincial Governments of Pakistan

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  • Tahir Sadiq

    (Department of Economics, Beaconhouse National University, Lahore)

Abstract

This paper aims to identify the strategy for fiscal deficit reduction by studying the causal relationship between federal and provincial taxes and expenditure using the Granger Causality test for the period 1980-81 to 2009-10. The results indicate the absence of a strong causality in either direction between tax revenues and expenditure, thereby highlighting the weaknesses of fiscal management in the country.

Suggested Citation

  • Tahir Sadiq, 2010. "The Causality between Revenues and Expenditure of the Federal and Provincial Governments of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 651-662.
    • Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:651-662
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    File URL: http://www.pide.org.pk/pdf/PDR/2010/Volume4/651-662.pdf
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    References listed on IDEAS

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    1. Henning Bohn, "undated". "Budget Balance Through Revenue or Spending Adjustments ? Some Historical Evidence for the United States (Reprint 013)," Rodney L. White Center for Financial Research Working Papers 03-91, Wharton School Rodney L. White Center for Financial Research.
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    Cited by:

    1. Neha Rajput & G. S. Bhalla, 2024. "Testing the Relationship Between Income and Expenditure of a Statutory Organization: Cointegration and Causality Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4338-4355, March.

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