How sustainable are fiscal budgets in the Kingdom of Swaziland?

Andrew Phiri

No 1810, Working Papers from Department of Economics, Nelson Mandela University

Abstract: The recently experienced Swazi fiscal crisis of 2011 has facilitated the need for an academic probe into the sustainability of fiscal budgets in the Kingdom. Against the absence of empirical evidence evaluating the sustainability of Swazi fiscal budget, our study fills the hiatus by econometrically evaluating the sustainability of the fiscal budget of the Swazi economy between 1999 and 2016. Our empirical study depends on a combination of linear and asymmetric unit root and cointegration empirical procedures to attain this objective. In reviewing the obtained results, the evidence obtained from the linear econometric frameworks is inconclusive whereas the results from the more vigorous asymmetric models point to the unsustainability of Swazi fiscal budget over both the short and long-run. Important policy implications for Swazi fiscal policymakers are drawn from the analysis.

Keywords: Fiscal budget; Fiscal Crisis; Swaziland; SACU; KSS nonlinear unit root test; Fourier function; nonlinear autoregressive distributive lag model. (search for similar items in EconPapers)
JEL-codes: C12 C13 C32 C51 H61 H62 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2018-03, Revised 2018-03
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