This article investigates the causal relationship between economic growth and defense spending in 77 developing countries. The study employs Granger-causality tests using annual time series data for each of the 77 countries to analyse the presence and direction of causality between the two variables. The results indicate that the relationship between economic growth and defense spending cannot be generalized across countries. It may depend, among other things on the sample period of study and the level of socioeconomic development of the country concerned.

This paper examines the impact of IMF programmes on government expenditure allocations in African LDCs since the late 1970s. There was no obvious impact on expenditure by major economic function; for expenditure by type, only subsidies changed significantly as a proportion of central government expenditure. A more detailed analysis of military expenditure found that it was more likely to be cut in countries involved with the IMF. Possibly, the economic weaknesses which drove some countries to the IMF also caused them to cut military expenditure.

This paper evaluates tax elasticities and the impact of discretionary tax measures on government revenue in Papua New Guinea (PNG) using a dynamic macroeconometric model of taxation which captures the interaction between GDP, individual tax systems and individual tax revenues and bases. Our findings show that economic growth and discretionary tax changes have both been effective in mobilizing additional tax revenue. However, the responsiveness of the individual tax system reflected base‐to‐GDP elasticity except personal income tax whose elasticity reflected increased tax rates.

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This paper seeks to investigate the manner in which, and the extent to which, Ghana adjusted to its economic imbalances in the 1983–88 period. The analysis involves a decomposition of the adjustment process into absorption reduction, switching and growth of traded goods output. The results show that successful adjustment to the external imbalance was achieved not so much by absorption reduction but by the expansion of traded goods output and switch of domestic expenditure in favour of non‐tradeable goods and services. The expansion of traded goods output was also the major source of increased domestic output and income during the period. Despite the considerable progress made, the growth of the economy is yet to become self‐sustaining based on the strength of domestic savings and private investment.