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Fiscal Convergence in Africa: What Role for Regional Economic Communities?

Gammadigbe Vigninou (), Daouda Sembene, Sampawende Tapsoba and Ismaël Issifou
Additional contact information
Daouda Sembene: Fonds Monétaire International
Ismaël Issifou: LEO - Laboratoire d'Économie d'Orleans - CNRS - Centre National de la Recherche Scientifique - Université de Tours - UO - Université d'Orléans

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Abstract: The literature on Optimal Currency Areas (OCA) has identified several channels for the ex post justification of common monetary areas based on the synchronicity criterion. These include trade, cross-border investments, mobility of factors, mobility of goods and services, and fiscal convergence of member countries. We focus on the later for the African continent. We analyze the role of African regional economic communities (RECs) in convergence of fiscal policies from 1990 to 2015. Our estimates show that African RECs reduce significantly fiscal divergence between countries. We further find that common monetary areas are more effective in fostering fiscal convergence. This result is in line with the argument of self-validation of monetary arrangements in Africa, despite low levels of cycle synchronization and trade intensity.

Keywords: Fiscal convergence; Common monetary areas; Africa (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr
Date: 2018-09-19
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01877380
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Published in FERDi, Working paper P233, September. 2018

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Journal Article: Fiscal Convergence in Africa: What Role for Regional Economic Communities? (2019)
Working Paper: Fiscal Convergence in Africa: What Role for Regional Economic Communities? (2018) Downloads
Working Paper: Fiscal Convergence in Africa: What Role for Regional Economic Communities? (2018) Downloads
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