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Revenue and expenditure nexus: A case study of ECOWAS

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  • Magazzino, Cosimo

Abstract

This paper aims to assess the relationship among fiscal variables (government revenue and expenditure) in Sub-Saharan African countries. Using yearly data for the period between 1980 and 2011 in fifteen ECOWAS countries, a weak long-run relationship between government expenditure and revenue emerge, but only in the case of WAMZ countries. Granger causality analysis show mixed results for WAEMU countries, while for four out of six WAMZ countries (Gambia, Liberia, Nigeria, and Sierra Leone) the 'tax-and-spend' hypothesis holds, since government revenue would drive the expenditure.

Suggested Citation

  • Magazzino, Cosimo, 2013. "Revenue and expenditure nexus: A case study of ECOWAS," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 7, pages 1-27.
  • Handle: RePEc:zbw:ifweej:201313
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2013-13
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    File URL: https://www.econstor.eu/bitstream/10419/71406/1/741334925.pdf
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    References listed on IDEAS

    as
    1. Montfort Mlachila & Tidiane Kinda, 2011. "The Quest for Higher Growth in the WAEMU Region; The Role of Accelerations and Decelerations," IMF Working Papers 11/174, International Monetary Fund.
    2. Ernest Aryeetey, 2001. "Regional Integration in West Africa," OECD Development Centre Working Papers 170, OECD Publishing.
    3. E D Balogun, 2010. "Alternative reconsideration of output growth differential for West African Monetary Zone," IFC Bulletins chapters,in: Bank for International Settlements (ed.), Proceedings of the SARB/IFC seminar on "Economic and financial convergence en route to regional economic integration: experience, prospects and statis, volume 32, pages 106-120 Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Olalekan Bashir Aworinde, 2013. "The tax-spend nexus in Nigeria: Evidence from Nonlinear Causality," Economics Bulletin, AccessEcon, vol. 33(4), pages 3117-3130.
    2. Phiri, Andrew, 2016. "Asymmetries in the revenue-expenditure nexus: New evidence from South Africa," MPRA Paper 75224, University Library of Munich, Germany.
    3. Obeng, Samuel, 2015. "A Causality Test of the Revenue-Expenditure Nexus in Ghana," MPRA Paper 63735, University Library of Munich, Germany, revised 25 Feb 2015.
    4. repec:seb:journl:v:15:y:2017:i:1:p:47-61 is not listed on IDEAS

    More about this item

    Keywords

    ECOWAS; Sub-Saharan Africa; economic growth; government expenditure; government revenue; panel;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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