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...

Sub-Saharan Africa (SSA)'s public debt burden remains a challenge to development. Key drivers of public debt include large-scale financing of infrastructure development, adverse impact of multiple shocks including COVID-19 pandemic, maturity mismatches, and high vulnerability to exchange rate...

This paper discusses the rationale and options for a fiscal anchor for South Africa and its potential for restoring and maintaining fiscal sustainability. It argues that a well designed fiscal anchor can be useful in the current fiscal milieu, but notes that the popularity of fiscal rules belies...

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...

This paper empirically examines South Africa's fiscal sustainability through a Markovswitching model which utilizes quarterly datasets for the period from 1960 to 2019. The results show that public debt responds positively, demonstrating a sustainable fiscal policy. Furthermore, considering the...

Given the rise in the government debt level in recent times, this paper aims to examine the effect of an increase in government size on risk premium and its transmission in the economy. We jointly identify the term spread shock (originating at the short end and the long end) and the government...