Budgetary Convergence in the WEAMU: Adjustment Through Revenue or Expenditure?

Jean-Claude Nachega and Ousmane Dore

No 2000/109, IMF Working Papers from International Monetary Fund

Abstract: A regional convergence pact adopted recently by the Conference of Heads of States of WAEMU provides a framework for fiscal convergence similar to the European Union’s Maastricht Treaty. Using bivariate co-integration and error-correction models, this paper investigates the relationship between revenue and expenditure in seven member countries to determine the feasibility and nature of the policy adjustment required to meet the new convergence criteria. The results indicate that, in the long run, there is causality running from revenue to expenditure in Burkina Faso and Senegal, from expenditure to revenue in Benin and Togo, a bidirectional causality in Côte d’Ivoire and Mali, and no causality in Niger.

Keywords: WP; revenue; Convergence; Granger causality; Co-integration; Error-correction; expenditure objective; granger cause expenditure; outlays ECM; expenditure granger; time series; expenditure data; expenditure decision; expenditure move; Government debt management; Budget planning and preparation; Fiscal stance; West Africa (search for similar items in EconPapers)
Pages: 31
Date: 2000-06-01
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Citations: View citations in EconPapers (2)

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