IDEAS home Printed from https://ideas.repec.org/a/taf/rseexx/v45y2021i4p243-259.html
   My bibliography  Save this article

The impact of fiscal policy on total factor productivity growth in a developing economy: evidence from Botswana

Author

Listed:
  • Sayed O. M. Timuno
  • Joel Hinaunye Eita

Abstract

Most empirical work on the nexus between fiscal policy and total factor productivity (TFP) is focussed on aggregate analysis and lack sector-specific evidence required to guide effective policy decisions. Our study addresses this gap by analysing the impact of fiscal policy on sectoral TFP growth in Botswana between 1984 and 2016 using the Autoregressive Distributive Lag method. The results suggest that focussing on aggregate TFP growth masks specific issues which are peculiar to various economic sectors. For instance, mineral tax, other tax revenue, and expenditure on social services were found to have a significant long-run positive impact on the TFP growth in the primary sector only, while a negative impact is witnessed in the secondary and tertiary sectors. SACU revenue has a positive impact on TFP growth in both the primary and tertiary sectors, while productive spending boosts TFP growth across all sectors. In addition, both the value-added tax and the non-mining income tax have a negative impact on TFP growth across all sectors. The speed of adjustment was found to be high in the primary sector compared to other sectors. The findings single out the importance of taking into account sector-specific fiscal policies in influencing sectoral TFP growth.

Suggested Citation

  • Sayed O. M. Timuno & Joel Hinaunye Eita, 2021. "The impact of fiscal policy on total factor productivity growth in a developing economy: evidence from Botswana," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 45(4), pages 243-259, October.
    • Handle: RePEc:taf:rseexx:v:45:y:2021:i:4:p:243-259
    DOI: 10.1080/03796205.2022.2053298
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03796205.2022.2053298
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/03796205.2022.2053298?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:taf:rseexx:v:45:y:2021:i:4:p:243-259. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rsee .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.