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

Irene Yackovlev, Victor Lledo and Lucie Gadenne

No 2009/274, IMF Working Papers from International Monetary Fund

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.

Keywords: WP; government spending; GDP growth; fiscal policy objective; central government; cyclical fiscal policy; terms of trade (search for similar items in EconPapers)
Pages: 31
Date: 2009-12-01
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Citations: View citations in EconPapers (14)

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