Political business cycle and fiscal discipline in Sub-Saharan Africa

We tested the Political Business Cycle theory in Sub-Sahara Africa. To provide an empirical explanation for this nexus, this paper used unbalanced panel data from thirty-six (36) Sub-Saharan African countries between 1990 and 2018. The system Generalized Method of Moment (GMM) developed by Arrelano...

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Autores principales:	Funsho Obakemi, Hammed Adesola Adebowale, Babatunde Nageri Yusuf, Timothy Terwase Nev
Formato:	article
Lenguaje:	EN
Publicado:	University of A Coruna 2021
Materias:	democracy election fiscal discipline politics Political science J Political institutions and public administration (General) JF20-2112
Acceso en línea:	https://doaj.org/article/c07c5319ee304877909f551c18bb26b0
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spelling	oai:doaj.org-article:c07c5319ee304877909f551c18bb26b02021-12-02T09:13:01ZPolitical business cycle and fiscal discipline in Sub-Saharan Africa10.17979/ejge.2021.10.2.67872254-7088https://doaj.org/article/c07c5319ee304877909f551c18bb26b02021-12-01T00:00:00Zhttps://revistas.udc.es/index.php/ejge/article/view/6787https://doaj.org/toc/2254-7088 We tested the Political Business Cycle theory in Sub-Sahara Africa. To provide an empirical explanation for this nexus, this paper used unbalanced panel data from thirty-six (36) Sub-Saharan African countries between 1990 and 2018. The system Generalized Method of Moment (GMM) developed by Arrelano-Bover/Blundell-Bond was employed to analyze the collected data. The results of the system GMM revealed that the fiscal deficit is significantly large in election years and the deficit spending spills into the year after the election, though not as high as in the election year. We could not, however, find a significant effect in the pre-election year. In addition, we found evidence suggesting that though democracy significantly lowers the fiscal deficit, it promotes higher deficit spending in the election year and the year after the election. Hence, the study established the existence of a political business cycle in Sub-Saharan African countries. The study thus recommends that sound economic policies should be put in place to reduce the persistent deficit in SSA so as to maintain sustainable fiscal health, as well as the sustainability of macroeconomics, particularly enhanced industrialization, as the study found that countries' fiscal deficits are lower in more industrialized countries in the region. Funsho ObakemiHammed Adesola AdebowaleBabatunde Nageri Yusuf Timothy Terwase NevUniversity of A Corunaarticledemocracyelectionfiscal disciplinepoliticsPolitical scienceJPolitical institutions and public administration (General)JF20-2112ENEuropean Journal of Government and Economics, Vol 10, Iss 2 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	democracy election fiscal discipline politics Political science J Political institutions and public administration (General) JF20-2112
spellingShingle	democracy election fiscal discipline politics Political science J Political institutions and public administration (General) JF20-2112 Funsho Obakemi Hammed Adesola Adebowale Babatunde Nageri Yusuf Timothy Terwase Nev Political business cycle and fiscal discipline in Sub-Saharan Africa
description	We tested the Political Business Cycle theory in Sub-Sahara Africa. To provide an empirical explanation for this nexus, this paper used unbalanced panel data from thirty-six (36) Sub-Saharan African countries between 1990 and 2018. The system Generalized Method of Moment (GMM) developed by Arrelano-Bover/Blundell-Bond was employed to analyze the collected data. The results of the system GMM revealed that the fiscal deficit is significantly large in election years and the deficit spending spills into the year after the election, though not as high as in the election year. We could not, however, find a significant effect in the pre-election year. In addition, we found evidence suggesting that though democracy significantly lowers the fiscal deficit, it promotes higher deficit spending in the election year and the year after the election. Hence, the study established the existence of a political business cycle in Sub-Saharan African countries. The study thus recommends that sound economic policies should be put in place to reduce the persistent deficit in SSA so as to maintain sustainable fiscal health, as well as the sustainability of macroeconomics, particularly enhanced industrialization, as the study found that countries' fiscal deficits are lower in more industrialized countries in the region.
format	article
author	Funsho Obakemi Hammed Adesola Adebowale Babatunde Nageri Yusuf Timothy Terwase Nev
author_facet	Funsho Obakemi Hammed Adesola Adebowale Babatunde Nageri Yusuf Timothy Terwase Nev
author_sort	Funsho Obakemi
title	Political business cycle and fiscal discipline in Sub-Saharan Africa
title_short	Political business cycle and fiscal discipline in Sub-Saharan Africa
title_full	Political business cycle and fiscal discipline in Sub-Saharan Africa
title_fullStr	Political business cycle and fiscal discipline in Sub-Saharan Africa
title_full_unstemmed	Political business cycle and fiscal discipline in Sub-Saharan Africa
title_sort	political business cycle and fiscal discipline in sub-saharan africa
publisher	University of A Coruna
publishDate	2021
url	https://doaj.org/article/c07c5319ee304877909f551c18bb26b0
work_keys_str_mv	AT funshoobakemi politicalbusinesscycleandfiscaldisciplineinsubsaharanafrica AT hammedadesolaadebowale politicalbusinesscycleandfiscaldisciplineinsubsaharanafrica AT babatundenageriyusuf politicalbusinesscycleandfiscaldisciplineinsubsaharanafrica AT timothyterwasenev politicalbusinesscycleandfiscaldisciplineinsubsaharanafrica
_version_	1718398209176371200

Political business cycle and fiscal discipline in Sub-Saharan Africa

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