The Causality between Revenues and Expenditure of the Federal and Provincial Governments of Pakistan

Tahir Sadiq
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Tahir Sadiq: Department of Economics, Beaconhouse National University, Lahore

The Pakistan Development Review, 2010, vol. 49, issue 4, 651–662

Abstract: This paper aims to identify the strategy for fiscal deficit reduction by studying the causal relationship between federal and provincial taxes and expenditure using the Granger Causality test for the period 1980-81 to 2009-10. The results indicate the absence of a strong causality in either direction between tax revenues and expenditure, thereby highlighting the weaknesses of fiscal management in the country.

Date: 2010
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