Fiscal Policy Responses to COVID-19 in Danida Priority Countries in Sub-Saharan Africa

Estmann, Christian

doi:10.2139/ssrn.3833411

Cited by 2 publications

(3 citation statements)

References 18 publications

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“…Furthermore, since the crisis (2007)(2008)(2009), these economies have had serious problems with consumption, production, and real income growth. As a result, fiscal policy in SSA nations is espoused by increasing investment in infrastructure development, which lowers the overall finance rate (Estmann et al, 2021;Naeem et al, 2023). Fiscal policy has a negative and lowering effect on finance, according to studies (Chadha et al, 2021;Lawal et al, 2018).…”

Section: Resultsmentioning

confidence: 99%

“…According to studies, different nations' responses to fiscal policies are dependent on their size of the government, the extent of financial development, the expansion of the economy (Easterly & Rebelo, 1993). Estmann et al (2021) argued in their study that in order to determine the appropriate interest rate, governments should look at the impact that fiscal measures have on both inflation and aggregate demand. According to Anyanwu (1999), fiscal policy's primary objective is to foster economic conditions that are beneficial to company growth while ensuring that every such government indicators of economic stability remain unchanged.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Linkage Between Fiscal Policy and Financial Development: Exploring the Moderating Role of Institutional Quality in Emerging Economies

Okine,

Appiah,

Tetteh

2023

OMEE

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This paper investigates the role of fiscal policy on financial development in Sub-Saharan African economies, drawing on a sample of 23 countries from 2000 to 2021 using the panel ARDL method after evidencing stationarity and co-integration properties among the variables. Our results show that an increase in fiscal policy and institutional quality decreases financial development in the long run. An increase in taxation and expenditure by the government affects the development of finance in SSA countries. Our results also show that an increase in foreign capital and industrial growth increases financial development in the long term. The outcome evidence that the interaction between fiscal policy and institutional quality exhibits a positive effect on financial development. Causality results reveal no directional link between fiscal policy, foreign capital, industrialization, and financial development with institutional quality indicating a single direction. The study suggested that SSA countries should focus on developing policies to track the implementation of adequate fiscal policy systems and structures. Institutional coherence within and between SSA nations is required for efficient fiscal policy development.

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Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

The Linkage Between Fiscal Policy and Financial Development: Exploring the Moderating Role of Institutional Quality in Emerging Economies

Okine,

Appiah,

Tetteh

2023

OMEE

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“…Studies show that countries respond differently to fiscal policies and this depends on their abilities in terms of the size of the government, level of financial development, growth of the economy, etc (Easterly and Rebelo, 1993). In their study, Estmann et al (2021), explained that governments through the central banks should examine the effect fiscal policies have on inflation as well as aggregate demand in the cause of setting the interest rate. In the words of Anyanwu (1993), the main goal of fiscal policy is to support economic situations favorable to business growth while making sure that every such government measures are constant with economic stability.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

Ricky-Okine¹,

Apreku–Djan²,

Akrofi³

et al. 2023

IJARAFMS

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Economic theory suggests that fiscal policies affect economic growth with extant studies proving this relationship in the context of countries in sub-Sahara Africa (Durusu-Ciftci et al., 2017). However, few studies have examined how fiscal policy impacts financial development leading to economic growth. The study, therefore, sought to examine how fiscal policies affect financial sector development in sub-Sahara Africa and to provide empirical support or otherwise to the conclusions of theory. Adopting the Fixed Effect (FE) estimator, the study on one hand revealed a positive significant relationship between fiscal policy and financial development and that Fiscal Policy influences financial development. Hence, the study showed that the implementation of fiscal policies by governments in SSA directly and positively leads to the financial sector development; thus leading to economic growth. However, the effect of fiscal policy on the financial development does not significantly affect economy growth compared as expected. On policy direction, government should focus on expanding the tax net as a way to increase its revenue and also to stimulate financial development. Again, policies towards financial inclusion should be aggressively pursued in SSA as these have practical implications for financial sector growth.

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Fiscal Policy Responses to COVID-19 in Danida Priority Countries in Sub-Saharan Africa

Cited by 2 publications

References 18 publications

The Linkage Between Fiscal Policy and Financial Development: Exploring the Moderating Role of Institutional Quality in Emerging Economies

The Linkage Between Fiscal Policy and Financial Development: Exploring the Moderating Role of Institutional Quality in Emerging Economies

Impact of Fiscal Policy on Financial Development in Sub-Sahara Africa

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