The External Debt-Servicing Constraint and Public Expenditure Composition: Evidence from African Economies

Augustin Fosu ()

No RP2007-36, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The paper explores the impact of a binding external debt-servicing constraint on the sectoral composition of government expenditures in the economies of Africa, where this constraint has traditionally been most prevalent. Applying seemingly unrelated regression (SUR) to 1975-94 five-year panel data for 35 countries, the paper finds that the implied debt service burden adversely affects the share of public spending in the social sector, with similar impacts on education and health.

Keywords: Public debt; Economic assistance and foreign aid; Public expenditures; Public investments; Regression analysis (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:rp2007-36

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