The Revenues and Expenditures of African Governments: Modalities and Consequences

This paper documents some dimensions of the economic behavior of African governments. It does so with the goal of trying to site the activities of these governments in the wider context of African economic performance as a whole. Like governments anywhere, African governments raise revenues, eniploy workers and make expenditures. The structure of African economies, however, gives special characteristics to each of these activities. In particular, there are important interdependencies between revenues, employment and expenditures, and in more ways than the obvious one that expenditures have to be funded and require employees for implementation. Among issues considered are: the dependence of government revenues on export prices; the unimportance of the personal income tax; the level of government wages relative to economic opportunities in the private sector; the role of education in altering the supply of government workers and their wages; the effect of government expenditures on government revenues, and the timing of these effects.