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Cyclical Patterns of Government Expenditures in Sub-Saharan Africa; Facts and Factors

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Listed author(s):
  • Irene Yackovlev
  • Victor Duarte Lledo
  • Lucie Gadenne

Abstract

This paper documents cyclical patterns of government expenditures in sub-Saharan Africa since 1970 and explains variation between countries and over time. Controlling for endogeneity, it finds government expenditures to be slightly more procyclical in sub-Saharan Africa than in other developing countries and some evidence that procyclicality in Africa has declined in recent years after a period of sharp increase through the 1990s. Greater fiscal space, proxied by lower external debt, and better access to concessional financing, proxied by larger aid flows, seem to be important factors in diminishing procyclicality in the region. The role of institutions is less clear cut: changes in political institutions have no impact on procyclicality.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/274.

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Length: 31
Date of creation: 01 Dec 2009
Handle: RePEc:imf:imfwpa:09/274
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Keywords: Cross country analysis; Developing countries; Aid flows; Business cycles; Capital flows; External debt; Economic models; Government expenditures; Fiscal policy; Political economy; Sub-Saharan Africa; and sub-Saharan Africa; government spending; fiscal space; expenditures;

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Cited by:

  1. Jean-Louis Combes & Rasmané Ouedraogo, 2014. "Does Pro-cyclical Aid Lead to Pro-cyclical Fiscal Policy? An Empirical Analysis for Sub-Saharan Africa," Working Papers halshs-01084600, HAL.
  2. Tedesco, Ilaria & Pelloni, Alessandra & Trovato, Giovanni, 0. "Oecd Agricultural Subsidies And Poverty Rates In Lower Income Countries," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3.
  3. Alexander D Klemm, 2014. "Fiscal Policy in Latin America over the Cycle," IMF Working Papers 14/59, International Monetary Fund.
  4. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
  5. Rasmane Ouedraogo, 2015. "Does pro-cyclical fiscal policy lead to more income inequality? An empirical analysis for sub-saharan Africa," Economics Bulletin, AccessEcon, vol. 35(2), pages 1306-1317.
  6. Elva Bova & Nathalie Carcenac & Martine Guerguil, 2014. "Fiscal Rules and the Procyclicality of Fiscal Policy in the Developing World," IMF Working Papers 14/122, International Monetary Fund.
  7. Pedro Conceição & Sebastian Levine, 2011. "The African Moment: On the Brink of a Development Breakthrough," UNDP Africa Policy Notes 2011-001, United Nations Development Programme, Regional Bureau for Africa.
  8. Nese Erbil, 2011. "Is Fiscal Policy Procyclical in Developing Oil-Producing Countries?," IMF Working Papers 11/171, International Monetary Fund.
  9. Sampawende J Tapsoba & Robert C York & Neree C.G.M. Noumon, 2016. "Can Statistical Capacity Building Help Reduce Procyclical Fiscal Policy in Developing Countries?," IMF Working Papers 16/209, International Monetary Fund.
  10. Sophia Gollwitzer & Eteri Kvintradze & Tej Prakash & Luis-Felipe Zanna & Era Dabla-Norris & Richard I Allen & Irene Yackovlev & Victor Duarte Lledo, 2010. "Budget Institutions and Fiscal Performance in Low-Income Countries," IMF Working Papers 10/80, International Monetary Fund.
  11. Remi Jedwab & Adam Storeygard, "undated". "Economic and Political Factors in Infrastructure Investment: Evidence from Railroads and Roads in Africa 1960–2015," Working Papers 2017-3, The George Washington University, Institute for International Economic Policy.
  12. Tidiane Kinda & Montfort Mlachila & Rasmané Ouedraogo, 2016. "Commodity Price Shocks and Financial Sector Fragility," IMF Working Papers 16/12, International Monetary Fund.

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