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Are fiscal budgets sustainable in South Africa? Evidence from provincial level data

Kambale Kavese () and Andrew Phiri ()
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Kambale Kavese: Eastern Cape Socio Economic Consultation Council

No 1804, Working Papers from Department of Economics, Nelson Mandela University

Abstract: This study uses the nonlinear autoregressive distributive lag (N-ARDL) model to investigate the expenditure-revenue relationship for all nine South African provinces using annual data spanning from 2000 to 2016. Whereas other cointegration models can only depict whether budgets are sustainable or not, the N-ARDL model presents features which further enable us to predict a course of action which individual provincial governments can take towards attaining higher levels of budgetary sustainability in both the short and the long-run. Ultimately, our empirical study demonstrates that the ‘one rule fit all’ strategy as suggested by previous studies may not be an appropriate approach seeing that provincial governments have differing requirements for attaining improved levels of budget sustainability.

Keywords: Expenditure; Revenues; Budget sustainability; South Africa. (search for similar items in EconPapers)
JEL-codes: C13 C32 H61 H72 (search for similar items in EconPapers)
Pages: 15 page
Date: 2018-01, Revised 2018-01
New Economics Papers: this item is included in nep-pbe
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http://repec.mandela.ac.za/RePEc/mnd/wpaper/paper.1804.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: Are fiscal budgets sustainable in South Africa? Evidence from provincial level data (2018) Downloads
Journal Article: Are fiscal budgets sustainable in South Africa? Evidence from provincial level data (2018) Downloads
Working Paper: Are fiscal budgets sustainable in South Africa? Evidence from provincial level data? (2018) Downloads
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