The sustainability of fiscal policy in southern African countries–a comparative empirical perspective

Mackiewicz, Michał

doi:10.1108/ijoem-06-2020-0696

Cited by 7 publications

(7 citation statements)

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“…Thus, we assume the impact of the quality of institutions on the cyclical behaviour of fiscal policy to be dependent on the stage of development, namely, to be different between groups of countries -emerging and developing economies (for brevity referred to as developing countries) and developed ones. With regard to our control variables, we expect the coefficient of lagged total surplus to be positive and lie between 0 and 1 and the impact of lagged general government gross debt and current inflation to be positive (Bystrov & Mackiewicz, 2020;Mackiewicz, 2023).…”

Section: Data and Statistical Methodsmentioning

confidence: 99%

The Cyclical Behaviour of Fiscal Policy: Are Developing Countries Different, and Do Institutions Matter?

Mackiewicz

2023

Technological and Economic Development of Economy

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The available empirical evidence shows that fiscal authorities commonly revert to procyclical fiscal policies instead of following the normative prescription of budgetary countercyclicality. The available empirical studies suggest that this phenomenon may be attributed to weak fiscal institutions. Hence, it is often advocated that strengthening institutions in the developing countries is a reliable way to improve the cyclical properties of fiscal policy. In this paper, we challenge this view by showing that the impact of institutions on the cyclical behaviour of fiscal policy is not uniform across all countries and differs significantly between advanced economies and the developing ones. In the latter, the impact of institutions on the quality of fiscal policy proves to be weak, which is in stark contrast to the strong relationship observed in developed economies. This surprising result suggests that the focus on improving institutional quality may be of little help as a tool to increase the countercyclicality of fiscal policy in the developing economies.

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Section: Data and Statistical Methodsmentioning

confidence: 99%

The Cyclical Behaviour of Fiscal Policy: Are Developing Countries Different, and Do Institutions Matter?

Mackiewicz

2023

Technological and Economic Development of Economy

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“…However, sustainable fiscal policies in Angola, Malawi and Bostwana were invulnerability in the recent unfavorable macroeconomic developments in Africa. For the rest of the countries the results are mixed as posits from the work of Mackiewicz [12]. For example, Evans [13] observed a negative but significant relationship in both short-run and longrun running from corruption, policy uncertainty and fiscal deficit to financial development and economic growth.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

Asymmetric Response of Fiscal Sustainability to the Financial Development in Nigeria

Muhammad,

Baffa,

Ismail

et al. 2023

AJEBA

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This study examines the asymmetric response of fiscal sustainability to financial development in Nigeria while augmenting the model with exchange rate volatility within the non-linear autoregressive distributed lag framework. The empirical evidence reveals that positive and negative shocks in domestic credit to the private sector result in significant unsustainable fiscal balance and fiscal sustainability both in the short run and long run respectively. Increase and decrease in annual market capitalization have a positive and negative significant impact on the fiscal sustainability in the long run respectively. Exchange rate devaluation or depreciation has a devastating effect on fiscal sustainability both in the short run and long run. Wald test revealed that credit to the private sector and annual market capitalization have an asymmetric effect on fiscal sustainability both in the short run and long run, while the exchange rate has no asymmetric effect on fiscal sustainability. For a sustainable fiscal stance, we recommend a financial model that channels credits towards productive activities to boost GDP as this will go a long way in reducing the debt-to-GDP ratio and enhancing solvency.

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“…• występuje efekt działania asymetrii informacji i moralnego hazardu, zwłaszcza przed wyborami w krajach rozwijających się, a manipulacje fiskalne dokonywane są na poziomie wydatków (Drazen, 2004); • skuteczność w zapewnieniu stabilności zależy od konserwatyzmu fiskalnego i zdolności rządu do ustalenia pułapu lub celu zadłużenia oraz zapewnienia dostępu do finansowania w czasie kryzysu (Afonso i Jalles, 2019); • reguły fiskalne są kluczowym instrumentem ograniczania ryzyka w sytuacji kryzysu (Afonso i Jalles, 2019; Sawadogo, 2020); • reguły fiskalne pojawiają się jako kluczowa odpowiedź na kryzysy finansowe i mają na celu konsolidację mechanizmów fiskalnych i całego procesu budżetowego poprzez wzmocnienie nowych mechanizmów zapewniających stabilność finansów publicznych (Onofrei i in., 2021); • stabilność fiskalną w rozumieniu sustainability postrzega się jako zmienną -a nie trwałą -właściwość polityki fiskalnej (Mackiewicz, 2021). Stosunkowo nowym kierunkiem badań nad stabilnością finansów publicznych są badania ukierunkowane na wpływ systemu finansowego na stabilność, w których analizuje się wpływ rynków finansowych na stabilność finansową (Ziolo i in., 2021).…”

Section: Stabilność Fiskalna -Przegląd Literaturyunclassified

Fiscal stability in EU countries

Filipiak

Wyszkowska

2022

Wiadomości Statystyczne. The Polish Statistician

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The article presents the evolution of the concept of fiscal stability towards the sustainability of public finances. The aim of the study is to join the discussion on the factors shaping fiscal stability and to verify their significance during disturbances caused by the financial and economic crisis and the impact that the COVID-19 pandemic had on the economy. The result of the undertaken research is a ranking of EU countries according to the sustainability of their public finances, created using one of the linear ordering methods, TOPSIS. In addition, the study allowed the indication of the factores determining the stability of public finances and its affecting its sustainability. The analysis was based on Eurostat data for 2010, 2015, 2017 and 2020. The study showed that the variation among the analysed countries’ sustainability of public finances decreased significantly in 2020 as compared to the previous years. Moreover, relatively significant changes in the ranking were observed in the analysed period in terms of the adopted criterion, which primarily resulted from changes in the countries’ level of economic growth and the size of their public debt in relation to GDP. In each of the studied years, Greece proved to have had the most unstable public finance. In the years 2010 and 2015, Ireland, Malta and Slovakia, respectively, occupied the first positions in the ranking, while in 2020 Romania, Lithuania, Poland and Bulgaria became the leaders.

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The sustainability of fiscal policy in southern African countries–a comparative empirical perspective

Cited by 7 publications

References 83 publications

The Cyclical Behaviour of Fiscal Policy: Are Developing Countries Different, and Do Institutions Matter?

The Cyclical Behaviour of Fiscal Policy: Are Developing Countries Different, and Do Institutions Matter?

Asymmetric Response of Fiscal Sustainability to the Financial Development in Nigeria

Fiscal stability in EU countries

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