Structural Transformation and Fiscal Policy in Botswana

Kelesego Mmolainyane ()
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Kelesego Mmolainyane: Botswana Institute for Development Policy Analysis

No 63, Working Papers from Botswana Institute for Development Policy Analysis

Abstract: This paper analyses impacts of fiscal policy on structural transformation in Botswana using structural vector autoregression (SVAR) model over the period of 1990 to 2015. The study uses an inclusive sustainable transformation (IST) index and government expenditure as proxies for structural transformation and fiscal policy respectively. Results show that prudent fiscal policy can be used as a major strategic tool for structural transformation in Botswana. Most evidently, IST index responds positively to government expenditure shocks over time. In addition, fiscal policy innovations dominantly account for movements in structural transformation in Botswana. Notwithstanding, Botswana has a lot of potential and opportunity to use its fiscal policy more effectively and efficiently, to promote an inclusive structural transformation that leads to sustainable economic growth.

Keywords: Structural transformation; Fiscal policy shocks; SVAR; Botswana (search for similar items in EconPapers)
JEL-codes: E62 L16 (search for similar items in EconPapers)
Pages: 28
Date: 2019-03
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bid:wpaper:63

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