During the past two to three decades, the ongoing process of globalisation has profoundly changed the international economic order. This order now faces new challenges in the wake of several recent financial crises and growing resistance from groups and countries who perceive themselves to be excluded from the claimed benefits of globalisation. Over the same period, views about the economic role of government have changed markedly, in large part because of the renewed preference for market-based solutions to economic problems. The debate about the economic role of fiscal policy is continuing, with questions about the optimal extent and nature of government intervention in market economies remaining contentious. Few participants in this debate, however, would deny that fiscal policy has an important role in developing countries, both with regard to the promotion of sustained economic growth and the reduction of poverty. Fiscal policy is likely to be of particular importance in the African context, where the challenges of raising growth rates and reducing poverty are acute. This paper traces salient aspects of the evolution of fiscal policy in sub-Saharan Africa since 1960 (mainly its contribution to the region's economic problems and the fiscal adjustment process during the 1980s and 1990s) and highlights the need for further reforms to consolidate the fiscal gains of the recent past. We take a broad view of the scope of fiscal policy that includes all national government decisions regarding the nature, level and composition of government expenditure, taxation and borrowing. This view encompasses the interdependent macroeconomic and microeconomic dimensions of fiscal policy, where the latter includes efficiency and equity issues.
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