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Political and Institutional Determinants of Fiscal Policy Persistence in West Africa

O. J. Umoh, Kenneth U. Onye and Johnson A. Atan

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the political economy of fiscal policy making in West Africa by relying on a two-fold estimation technique, namely – the Instrumental variable regression model which accounts for potential endogeneity issue in the data and the Generalized Least Square regression model. The analysis covered 14 West African countries and spans over the period 1980 to 2016. The key results are as follows. First, we find evidence that fiscal policy has been more persistence in the region. This suggests that the governments of West African economies are either unwilling or just unable to adequately implement counter-cyclical fiscal policy. Second, fiscal policymaking has generally been drivenby political and institutional factor rather than on the basis of sound economic considerations. And third, the core politico-institutional factors determining fiscal persistence include corruption, government effectiveness and rule of law.

Keywords: Fiscal Persistence; political stability; Corruption; West Africa (search for similar items in EconPapers)
JEL-codes: E62 H3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pol
Date: 2018
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