La crédibilité budgétaire au Sénégal

Diagne, Youssoupha Sakrya (2014): La crédibilité budgétaire au Sénégal. Published in: dpee.sn

Abstract

This paper measures fiscal credibility in Senegal from 1993 to 2013. Empirical tests developed by Hamilton and Flavin (1986), Trehan and Walsh (1991) and Quintos (1995) are performed on Senegalese data to assess fiscal sustainability. Results show that the intertemporal budget constraint is weakly met. Public expenditures are partially covered by Government’s revenue according to the long term relationship between both variables. 1% increase in government spending is covered by 0.56% additional revenue. However, Senegal performs better than France according to estimates provided by INSEE (2004) which show a 0.24% adjustment of public spending by Government’s revenue between 1978 and 2003. In fact, Senegal’s result is close to the one obtained by Quintos (1992) for the United States during the period 1950-1992 who finds a measure of 0.6. However, spending process in Senegal suffers from a lack of discipline reflected in repeated changes in the spending composition within the year. This issue needs to be addressed as it weakens institutions, threatens fiscal transparency and undermines growth and poverty reduction targets.

• Item Type: MPRA Paper
• English Title: Fiscal credibility in Senegal
• Language: French
• Keywords: Fiscal credibility, Fiscal discipline, intertemporal budget constraint
• Subjects: H - Public Economics > H6 - National Budget, Deficit, and Debt > H61 - Budget ; Budget Systems; H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt ; Debt Management ; Sovereign Debt; H - Public Economics > H6 - National Budget, Deficit, and Debt > H68 - Forecasts of Budgets, Deficits, and Debt

References

Afonso, A. (2005). “Fiscal Sustainability: The Unpleasant European Case”. FinanzArchiv / Public Finance Analysis, Vol. 61, No. 1 (2005), pp. 19-44. Afonso, A. and C. Rault (2007). What Do We Really Know about Fiscal Sustainability in the EU?, ECB Working Paper Series, No. 820.

Alt, J., Lassen, D, D. et Wehner, J.(2012). Moral Hazard in an Economic Union: Politics, Economics, and Fiscal Gimmickry in Europe. Political Science and Political Economy Working Paper Department of Government London School of Economics No. 5/2012

Artus, P. (1997). Rigueur budgétaire, crédibilité des politiques budgétaires et comportement de consommation. Revue économique. Volume 48, n°3, 1997. pp. 481-493.

Beetsma.R, Giuliodori, M. et and Wierts. P. (2009). Planning to cheat: EU fiscal policy in real time. University of Amsterdam; University of Amsterdam; De Nederlandsche Bank

Bos, F. and Teulings, C. (2010), Lessons from the Netherlands, Paper to Conference on Independent Fiscal Institutions, March 18-19, Fiscal Council Republic of Hungary, Budapest.

Claeys, P. (2007). Sustainability of EU fiscal policies: A panel test (Documents de Treball 2007/02). Institut de Recerca en Economia Aplicada, University of Barcelona.

Curristine, T., J. Harris et J. Seiwald (2013): “Case studies of fiscal councils – Functions and impact.” IMF Policy Paper. Washington, D.C.: The International Monetary Fund. Schaechter et al, 2012

De Castrof., J.-M. Gonzáles-Paramo et P.hernádezdecos (2001). Evaluating the dynamics of fiscal policy in Spain: Patterns of interdependence and consistency of public expenditure et revenues. Banco De España, Documento de Trabajo, n° 0103

Frankel. J.A. (2011): “Over-optimism in forecasts by official budget agencies and its implications.” Oxford Review of Economic Policy, 27(4): 536–562.

HAKKIO C. et M. RUSH (1991). Is the budget deficit ‘too large’? Economic Inquiry, 29(3), pp. 104-118.

Hamilton, J., et Flavin, M. (1986). On the limitations of government borrowing: A framework for empirical testing. American Economic Review, 76(4), 808-816.

Horváth, B. et Székely, István P. (2003). “The Role of Medium-Term Fiscal Frameworks for Transition Countries: The Case of Bulgaria”. Emerging Markets Finance & Trade, Vol. 39, No. 1, The Role of Fiscal Reforms in theTransition (Jan. - Feb., 2003), pp. 86-113.

INSEE (2004). LA DETTE PUBLIQUE EN FRANCE : la tendance des vingt dernières années est-elle soutenable ? Dossier la dette publique, l’Economie française, 2004-2005

Keynes, J. (1923). “A tract on monetary reform”. In the collected writings of John Maynard Keynes, vol. IV, London: Macmillan, (1971 edition).

Jonung, L. and M. Larch (2006). Improving Fiscal Policy in the EU: the Case for Independent Forecasts, Economic Policy 21, 47, 491-534.

Perivier-Timbeau, H. (2003). Les mesures d'incitation au travail des personnes peu qualifiées. HAL Id: hal-00972680

Persson, T . et Tabellini, G. (1996). Federal Fiscal Constitutions : Risk Sharing and Moral Hazard. Econometrica, Econometric Society, Vol 64 (3), pages 623-46, May

Trehan, B., et Walsh, C. (1991). Testing intertemporal budget constraints: Theory and applications to U.S. federal budget and current account deficits. Journal of Money Credit and Banking, 23(2), 206- 223.

Quintos, C. (1995). Sustainability of the deficit process with structural shifts, Journal of Business and Economic Statistics, 13(4), pp. 409-417.

Von Hagen, J., (1998). European Experience With Fiscal Initiatives: Fiscal Institutions, Maastricht Guidelines, and EMU, in Thomas J. Courchene and Thomas A. Wilson (eds.), Fiscal Targets and Economic Growth. Kingston:J Deutsch Institute.

Von Hagen, J. (2010). The Scope and Limits of Fiscal Councils. Paper presented at the Conference on Independent Fiscal Councils, Budapest

Von Hagen, J. et G. Wolff (2006), “What do deficits tell us about debts? Empirical evidence on creative accounting with fiscal rules”, Journal of Banking and Finance, 30, 3259-79.