Published April 17, 2018 | Version v1
Journal article Open

Are fiscal budgets sustainable in South Africa? Evidence from provincial level data

  • 1. Faculty Eastern Cape Socio Economic Consultation Council, South Africa
  • 2. Faculty of Business and Economic Studies, Nelson Mandela University, South Africa

Description

This study uses the nonlinear autoregressive distributive lag (N-ARDL) model to investigate the expenditure-revenue relationship for all nine South African provinces using annual data spanning from 2000 to 2016. Whereas other cointegration models can only depict whether budgets are sustainable or not, the N-ARDL model presents features which further enable us to  predict a course of action which individual provincial governments can take towards attaining higher levels of budgetary sustainability in both the short and the long-run. Ultimately, our empirical study demonstrates that the ‘one rule fit all’ strategy as suggested by previous studies may not be an appropriate approach seeing that provincial governments have differing requirements for attaining improved levels of budget sustainability.

Files

30_BEH_2018_Vol14_Issue2_Kavase_and_Phiri_Are_fiscal_budgets_sustainable_South_Africa_pp.415-423.pdf

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