Can Statistical Capacity Building Help Reduce Procyclical Fiscal Policy in Developing Countries?

By Sampawende J Tapsoba, Robert C York, Neree C.G.M. Noumon

November 8, 2016

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Sampawende J Tapsoba, Robert C York, and Neree C.G.M. Noumon Can Statistical Capacity Building Help Reduce Procyclical Fiscal Policy in Developing Countries?, (USA: International Monetary Fund, 2016) accessed November 8, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Few papers have attempted to assess the role of “capacity,” especially in the area of macroeconomic statistics. Consequently, we make an attempt to advance this literature through the construction of a “statistical capacity building index,” and then test its explanatory power on the cyclicality of government spending. Using panel data from 62 developing countries, we find evidence that improvements in this index are associated with less procyclicality of government spending over the period 1990–2012; with the significance of this relationship dependent upon the quality of administrative and technical capacity of budgetary institutions.

Subject: Budget planning and preparation, Expenditure, Fiscal policy, Procyclical fiscal policy, Procyclicality

Keywords: Dependent variable, Government spending, Index SCB, SCB index, Standard deviation, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/209
Stock No:

WPIEA2016209
ISBN:

9781475552003
ISSN:

1018-5941

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