Aid and Fiscal Deficits: Lessons from Uganda on the Implications for Macroeconomic Management and Fiscal Sustainability

Brownbridge, Martin; Tumusiime-Mutebile, Emmanuel

doi:10.1111/j.1467-7679.2007.00366.x

Cited by 20 publications

(11 citation statements)

References 12 publications

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“…The debt burden, however, has caused a decrease in public investment spending and an increase in budgetary deficits. Uganda has also undertaken substantial trade liberalization in an effort to improve its balance of payment situation [6]. This necessitated knowledge of the determinants of tax revenue performance.…”

Section: Problem Statementmentioning

confidence: 99%

Trade Liberalization and Tax Revenue Performance in Uganda

Gaalya¹

2015

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The study uses fixed and random effects models to establish the determinants of tax revenue performance. The data cover the period 1994 to 2012, with the results suggesting that exchange rates, trade openness and share of industry to GDP positively influence tax revenue performance while the agriculture share to GDP and foreign aid negatively influence tax revenue performance. Importantly the coefficient for trade openness that is used as a proxy for trade liberalization indicates a positive influence on tax revenue performance.

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Section: Problem Statementmentioning

confidence: 99%

Trade Liberalization and Tax Revenue Performance in Uganda

Gaalya¹

2015

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“…The debt burden, however, has caused a decrease in public investment spending and an increase in budgetary deficits. Uganda has also undertaken substantial trade liberalization in an effort to improve its balance of payment situation [5]. This has necessitated knowledge of the determinants of import demand.…”

Section: Problem Statementmentioning

confidence: 99%

“…In Uganda increased import demand has caused a recurrent balance of payment disequilibrium [5]. For example in the period 2001-2012, while world average imports growth in value was 7.7 percent, Uganda's average imports growth was 13.4 percent, Uganda's average imports growth almost doubled the world import growth 1 .…”

Section: Introductionmentioning

confidence: 99%

Trade Liberalization and Disaggregated Import Demand in Uganda

Samuel¹

2015

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Studies investigating determinants of import demand for Uganda present aggregate findings yet there is a need to disaggregate the findings for specific sectors. This creates a research gap on disaggregated findings of import demand. This research attempts to fill this research gap by establishing determinants of import demand using disaggregated sector level data for consumer, intermediate and capital goods. The study estimates the long-run and short-run import demand elasticities for consumer, intermediate and capital goods over the period (1994 to 2012). The results show that there exists a cointegrating relationship between the disaggregated import demand and the following set of variables; relative import price, GDP per capita, real effective exchange rate, foreign exchange rate reserves and trade openness. The long run elasticity appears more responsive to import demand compared to the short-run elasticity. Importantly the effect of a change in trade openness on the volume of imports is positive, suggesting trade liberalization increases import demand.

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“…10 10 Brownbridge and Tumusiime‐Mutebile (2007) document how the sterilization strategy led to a sixfold increase in net sales of government securities. The bulk of the purchases were made by commercial banks, which doubled their ratios of government security holdings to deposits, while their loans to the private sector fell by an almost equivalent amount. …”

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confidence: 99%

The Macroeconomic Management of Increased Aid: Policy Lessons from Recent Experience

Aiyar

Berg

Hussain

2009

Review Development Economics

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This paper investigates the macroeconomic challenges created by a surge in aid inflows. It develops an analytical framework for examining possible policy responses to increased aid, in terms of absorption and spending of aid-where the central bank controls absorption through monetary policy and the sale of foreign exchange and the fiscal authority controls spending. Different combinations of absorption and spending lead to different macroeconomic consequences. Evidence from five countries that recently experienced an aid surge (Ethiopia, Ghana, Tanzania, Mozambique and Uganda) shows no support for aidrelated real exchange rate appreciation in these countries, but indicates that the fear of Dutch disease played an important part in the policy reaction to aid surges. Fiscal and monetary authorities should coordinate their responses to an aid surge, because an uncoordinated response-typically when fiscal authority wants to spend aid while the central bank wants to avoid exchange rate appreciation-can have serious negative macroeconomic consequences.

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Aid and Fiscal Deficits: Lessons from Uganda on the Implications for Macroeconomic Management and Fiscal Sustainability

Cited by 20 publications

References 12 publications

Trade Liberalization and Tax Revenue Performance in Uganda

Trade Liberalization and Tax Revenue Performance in Uganda

Trade Liberalization and Disaggregated Import Demand in Uganda

The Macroeconomic Management of Increased Aid: Policy Lessons from Recent Experience

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