Nexus Between Fiscal Discipline And The Budget Process In Africa: Evidence From Nigeria

Adekunle, Wasiu and Bekoe, William and Badmus, Sheriff and Anagun, Michael and Alimi, Wasiu (2021): Nexus Between Fiscal Discipline And The Budget Process In Africa: Evidence From Nigeria.

Abstract

This paper examined the nexus between fiscal discipline and the budget process in Nigeria over the period from 1990 to 2020. Findings showed that the level of fiscal discipline in Nigeria as measured by two proxies of fiscal deficit gap and public debt gap is more enhanced under zero-based budgeting than under current incremental budgeting system. The study also established that civilian administrations are more prone to fiscal indiscipline relative to military dispensations. The paper also revealed the significant role of net foreign aid receipts in significantly narrowing fiscal deficit and public debt gaps in the short-run and long-run, as well as, the significant widening impact of an increasing government size on public debt in the long run. The study recommends, among others, the increasing need to restore fiscal discipline in public affairs through reversion to zero-based budgeting system.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fiscal Discipline, Fiscal Responsibility Act, Debt threshold, Zero-based budgeting, Incremental budgeting, ARDL, Nigeria
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Prediction Methods ; Simulation Methods; H - Public Economics > H6 - National Budget, Deficit, and Debt > H61 - Budget ; Budget Systems; H - Public Economics > H6 - National Budget, Deficit, and Debt > H68 - Forecasts of Budgets, Deficits, and Debt

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