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The Political Economy of Fiscal Institutions and Macroeconomic Management in Sudan

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  • Kabbashi M. Suliman

    ()

    (University of Khartoum)

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    The literature on distributive politics indicates that many low-income countries are saddled with extractive institutions that not only contribute to politically biased fiscal outcomes, but tend to undermine long-run real growth. An analytical narrative based on the critical juncture and path dependence general equilibrium approach is utilized to highlight the effects of the political institutions on the fiscal policy outcomes in Sudan and indicate their mechanisms of perpetuation. The results suggest that Sudan has experience two critical junctures that featured, respectively, the path-dependence of public source of finance and budgeting based on cotton and its eventual destruction. The political patronage appears to be the major mechanism of reproduction of the ‘path dependent’ state development including the source of public revenue. But, the greater centralization of power and parsonage networks has resulted in problematic incorporation of the rural communities triggering a process of territorial fragmentation that escalated into open civil wars, contributed to the cumulative decline of the historic source of public finance and eventually led to the breakup of the state. The policy implications of these findings are outlined.

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    Paper provided by Economic Research Forum in its series Working Papers with number 1044.

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    Length: 45
    Date of creation: 09 Jan 2016
    Date of revision: 09 Jan 2016
    Publication status: Published by The Economic Research Forum (ERF)
    Handle: RePEc:erg:wpaper:1044
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    14. World Bank, 2007. "Sudan : Public Expenditure Review, Synthesis Report," World Bank Other Operational Studies 7672, The World Bank.
    15. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
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