Fiscal rules and the pro-cyclicality of public investment in the West African economic and monetary union

Sebastien Dessus (), Jose Luis Diaz Sanchez and Aristomene Varoudakis
Authors registered in the RePEc Author Service: Jose Luis Diaz Sanchez

No 6562, Policy Research Working Paper Series from The World Bank

Abstract: Evidence from a large panel of low-income and lower middle-income countries over the period 1995-2012 suggests that, contrary to other countries, public investment in the West African Economic and Monetary Union (WAEMU) has been pro-cyclical. Public investment contracts more in"bad times"than it increases in"good times"and appears to have become pro-cyclical since the introduction of the fiscal convergence criteria in 1994. The pro-cyclicality of public expenditure and the high asymmetry of shocks that affect WAEMU countries justify exploring options for greater counter-cyclicality of rules-based fiscal frameworks and for risk-sharing.

Keywords: Public Sector Expenditure Policy; Debt Markets; Economic Stabilization; Fiscal Adjustment; Access to Finance (search for similar items in EconPapers)
Date: 2013-08-01
New Economics Papers: this item is included in nep-afr, nep-dev and nep-pbe
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Fiscal Rules and the Pro‐cyclicality of Public Investment in the West African Economic and Monetary Union (2016)
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