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Explaining Procyclical Fiscal Policy in African Countries

Explaining Procyclical Fiscal Policy in African Countries Simple time series regressions for 37 low-income African countries during 19602004 suggest that government consumption is highly procyclical, with consumption responding more than proportionately to fluctuations in output in many cases. The results from a cross-country specification suggest that government consumption is more procyclical in those African countries that are more reliant on foreign aid inflows and that are less corrupt, and that it is less procyclical in countries with unequal income distribution and that are more democratic. These results contrast with those from recent research using data sets that comprise a more diverse groups of countries in terms of geography and income levels. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

Explaining Procyclical Fiscal Policy in African Countries

Journal of African Economies , Volume 17 (3) – Jun 11, 2008

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Publisher
Oxford University Press
Copyright
© Published by Oxford University Press.
Subject
Articles
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jae/ejm029
Publisher site
See Article on Publisher Site

Abstract

Simple time series regressions for 37 low-income African countries during 19602004 suggest that government consumption is highly procyclical, with consumption responding more than proportionately to fluctuations in output in many cases. The results from a cross-country specification suggest that government consumption is more procyclical in those African countries that are more reliant on foreign aid inflows and that are less corrupt, and that it is less procyclical in countries with unequal income distribution and that are more democratic. These results contrast with those from recent research using data sets that comprise a more diverse groups of countries in terms of geography and income levels.

Journal

Journal of African EconomiesOxford University Press

Published: Jun 11, 2008

Keywords: JEL classification E62 H50 H60

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