EconPapers    
Economics at your fingertips  
 

An Investigation into the Intertemporal Spending Path of Local Government in Mauritius

Sanju Naraidoo and Sanjeev K. Sobhee
Additional contact information
Sanju Naraidoo: Sanju Naraidoo (corresponding author) is at the Department of Accounting, Finance and Law, Curtin Mauritius.
Sanjeev K. Sobhee: Sanjeev K. Sobhee is at the Department of Economics and Statistics, Faculty of Social Sciences and Humanities, University of Mauritius; email: sksobhee@uom.ac.mu

Margin: The Journal of Applied Economic Research, 2020, vol. 14, issue 4, 432-453

Abstract: This article examines whether local government expenditure in Mauritius is characterised by an intertemporal decision-making path. In other words, to what extent does local government expenditure respond to contemporaneous changes in revenues. In this respect, the article contributes to the existing body of literature by exploring the context of an upper-middle-income country like Mauritius while factoring intertemporal choice in the supply of local public goods. Moreover, the article determines the short-run and long-run responsiveness of local public expenditure to Gross Domestic Product (GDP) through an error correction model based on time series data for Mauritius over the period 1987–2017. Our findings indicate that local government spending becomes less sensitive to its previous values when GDP and its past values are introduced as control variables in the model. Local government expenditure and real output are also found to be co-integrated or to share a long-term relationship. JEL Classification: B22, C1, D9, H4, H11

Keywords: Local government expenditure; Intertemporal spending; Mauritius; Cointegration; GDP growth; Error correction model; Time series (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0973801020953398 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:14:y:2020:i:4:p:432-453

DOI: 10.1177/0973801020953398

Access Statistics for this article

More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research
Bibliographic data for series maintained by SAGE Publications ().

 
Page updated 2020-12-26
Handle: RePEc:sae:mareco:v:14:y:2020:i:4:p:432-453