Can Statistical Capacity Building Help Reduce Procyclical Fiscal Policy?

Few papers have attempted to assess the role of ‘capacity’, especially in the area of macroeconomic statistics. Consequently, we make an attempt to advance this literature through the construction of a ‘statistical capacity building index’ and then test its explanatory power on the cyclicality of go...

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Bibliographic Details
Published in:Journal of international development 2017-05, Vol.29 (4), p.407-430
Main Authors: Tapsoba, Sampawende J.‐A., Noumon, Codjo Neree, York, Robert C.
Format: Article
Language:English
Subjects:
budget institutions
capacity building
Capacity building approach
Developing countries
Fiscal policy
Government spending
LDCs
Macroeconomics
Panel data
Power
procyclicality
Statistics
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Summary:Few papers have attempted to assess the role of ‘capacity’, especially in the area of macroeconomic statistics. Consequently, we make an attempt to advance this literature through the construction of a ‘statistical capacity building index’ and then test its explanatory power on the cyclicality of government spending. Using panel data from 62 developing countries, we find evidence that improvements in this index are associated with less procyclicality of government spending over the period 1990–2012, with the significance of this relationship dependent upon the quality of administrative and technical capacity of budgetary institutions. Copyright © 2017 John Wiley & Sons, Ltd.
ISSN:0954-1748
1099-1328
DOI:10.1002/jid.3273