Debt-financed fiscal stimulus programmes directly stimulate aggregate demand through government expenditure or tax cuts, but their effectiveness is highly dependent on direct crowding out of private sector expenditure, spillover effects to the private sector through a higher risk premium on...

In the wake of the current financial and economic crises, the economies of sub-Saharan Africa find themselves squeezed between likely reductions in official development assistance and the pressing challenge to eradicate poverty. Public expenditure allocation to the social sector and to public...

Rising public debt in sub-Saharan Africa remains a matter of concern. We provide an analysis of public debt and debt sustainability in Tanzania, focusing on external debt. Though current and previous analyses using the IMF-World Bank debt sustainability framework indicate low risk of public...

This paper analyses the history and effectiveness of the two major mechanisms of resolution of balance of payments crisis. It argues that IMF lending has met its counter-cyclical objectives through history and has been improving in terms of providing adequate lending facilities as well as...

We utilize the recently updated UNU-WIDER Government Revenue Dataset, which covers key indicators on tax and non-tax revenues for 196 countries since the 1980s, to study the dynamics of government revenue tax collection across selected periods from 1985 up to the most recent available year...

A substantial amount of aid to developing countries is given to the government, or goes through the budget, meaning it should have an impact on government fiscal behaviour (particularly on government spending). The few existing empirical studies on the effects of aid on government spending...

The prescription of optimally managing natural resource revenue windfalls by smoothing consumption across generations using an intergenerational sovereign wealth fund that only invests in foreign assets is not appropriate for resource-rich developing economies. It is better for these economies...

A dynamic relationship between foreign aid and domestic fiscal variables in Uganda is analysed using a cointegrated vector autoregressive model over the period 1972-2008. Results show that aid is a significant element of long-run fiscal equilibrium, is associated with increased tax effort and...

Aid is said to be fungible at the aggregate level if it raises government expenditures by less than the total amount. This happens when the recipient government decreases domestic revenue, decreases net borrowing, or when aid bypasses the budget. This study makes three contributions to both...

States' fiscal capacity plays a pivotal role in developing economies, but it is less clear what its determinants are or what explains cross-country differences. We focus on the impact of natural resources. Standard arguments suggest that natural resources rents may reduce incentives to invest in...