Fiscal Rules and the Pro‐cyclicality of Public Investment in the West African Economic and Monetary Union
Evidence from a large panel of low‐income and lower middle‐income countries over the period 1995–2012 suggests that, contrary to that in other countries, public investment in the West African Economic and Monetary Union has been pro‐cyclical. Public investment contracts more in ‘bad times’ than it increases in ‘good times’ and appears to have become pro‐cyclical since the introduction of the fiscal convergence criteria in 1994. The pro‐cyclicality of public expenditure and the high asymmetry of shocks that affect West African Economic and Monetary Union countries justify exploring options for greater counter‐cyclicality of rules‐based fiscal frameworks and for risk sharing. Copyright © 2014 John Wiley & Sons, Ltd.
Volume (Year): 28 (2016)
Issue (Month): 6 (08)
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- Devarajan, Shantayanan, 1997. "Real Exchange Rate Misalignment in the CFA Zone," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(1), pages 35-53, March.
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