Departmental Papers

Cyclical Behavior of Fiscal Policy among Sub-Saharan African Countries

By Tetsuya Konuki, Mauricio Villafuerte

August 24, 2016

Download PDF

Preview Citation

Format: Chicago

Tetsuya Konuki, and Mauricio Villafuerte. Cyclical Behavior of Fiscal Policy among Sub-Saharan African Countries, (USA: International Monetary Fund, 2016) accessed September 18, 2024

Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Excessively procyclical fiscal policy can be harmful. This paper investigates to what extent the fiscal policies of sub-Saharan African countries were procyclical in recent years and the reasons for the degree of fiscal procyclicality among these countries. It finds that a tendency for procyclical fiscal policy was particularly pronounced among oil exporters and after the global financial crisis. It also finds a statistically significant causal link running from deeper financial markets and higher reserves coverage to lower fiscal policy procyclicality. Fiscal rules supported by strong political commitment and institutions seem to be key to facilitating progress for deeper financial markets and stronger reserves coverage.

Subject: Financial sector policy and analysis, Fiscal policy, Fiscal stance, Output gap, Procyclical fiscal policy, Procyclicality, Production

Keywords: African country, Countercyclical fiscal policies, Country, DP, DPPP, Fiscal policy anchor, Fiscal policy in the region, Fiscal policy management, Fiscal policy principle, Fiscal policy Procyclicality, Fiscal policy stance, Fiscal stance, GDP, Global, Nonresource output gaps, Output gap, Price, Procyclical fiscal policy, Procyclicality, Resource fund, Resource revenue, Sub-Saharan Africa, Way fiscal policy

Publication Details

  • Pages:

    39

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Departmental Paper No. 2016/009

  • Stock No:

    CBFPSACEA

  • ISBN:

    9781513563541

  • ISSN:

    2616-5333