Exercising fiscal prudence in periods of deteriorating fiscal balance requires sound policies which promote debt sustainability. This paper estimates a dynamic cross-country model and investigates the impact of domestic debt on economic growth and private sector credit in a panel of 21 sub-Saharan African (SSA) countries over the period 1985 to 2010. System-GMM results reveal a non-linear relationship between domestic debt and economic growth, characterized by a maximum turning point of 11.4 per cent of GDP. In addition, domestic debt is found to crowd out private sector credit by an elasticity of negative 0.3 per cent of GDP, deterring capital accumulation and private sector growth. These findings underscore the need for effective debt management strategies which incorporate debt ceiling to limit domestic indebtedness, as well as the design of financial policies which enhance credit availability, promote fiscal discipline and deepen domestic debt markets on the continent.

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This article empirically examines how an individual's economic, social and political capital affects their propensity to make bribe payments in exchange for public services. Using an individual‐level survey on bribes, the econometric results suggest that the burden of bribery is borne by the poor, but substantially decreases when institutions that constrain bureaucratic corruption are strong and effective. The results also show that the incidence of bribery decreases when social capital is high but increases when political networks are prevalent. These findings support the need to combine anti‐corruption reforms with poverty reduction strategies and social policies in order to foster equity in public services provision in Kenya.

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