South African Journal of Economics · 2018 · 17 citations · 38 references
Fiscal IssueBuilding ResilienceDevelopment EconomicsEconomic DevelopmentAfrican Public PolicySocial SciencesEconomic Policy AnalysisSub‐saharan AfricaGmm EstimationFiscal PolicyAfrican DevelopmentEconomicsPublic PolicySocietal FragilityPublic ExpenditureReverse CausalityAfrican PoliticsPublic FinanceEconomic PolicyResilience AnalysisBusinessFiscal InstitutionsDevelopment PolicyFiscal Policies
Abstract This paper studies the role of fiscal policies and institutions in building resilience in sub‐Saharan African countries, focussing on 26 countries that were deemed fragile in the 1990s. We use a probabilistic framework together with GMM estimation to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as the quality of public expenditure, are significantly and robustly associated with building resilience. Similar conclusions arise from a qualitative study of 7 sub‐Saharan African countries in the sample that built resilience since the 1990s.
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