International Conference on Eurasian Economies
5-7 October 2017 – Bishkek, KYRGYZSTAN
Paper detail
Paper ID : 2005
Status : Paper published
Language : English
Topic : Growth and Development
Presenter: Assoc. Prof. Dr. Savaş Çevik
Session : 3A Sectoral Analysis
Natural Resources Revenue, Fiscal Policy and Economic Growth: Panel Data Analysis for Sub-Saharan Africa Countries
Natural Resources Revenue, Fiscal Policy and Economic Growth: Panel Data Analysis for Sub-Saharan Africa Countries
- Assoc. Prof. Dr. Savaş Çevik (Selçuk University, Türkiye)
- Prof. Dr. Ahmet Ay (Selçuk University, Türkiye)
- Ph.D. candidate Mahamane Moutari Abdou Baoua (Selçuk University, Türkiye)
Abstract
The main purpose of this study is to examine the relationship between natural resources revenue, fiscal policy and economic growth for 35 selected Sub-Saharan African countries. The panel data covering the periods of 1986-2014 was analyzed by using the fixed/random effect model estimation and the panel causality test. We also performed the panel unit root test in order to insure that our variables are stationary. The empirical results indicate that there is insignificant negative effect of natural resources revenue and bad fiscal policy on the economic growth. However, there is significant positive effect of capital formation on economic growth. We also found a bidirectional causality relationship between Natural resources rents and economic growth. There is also unidirectional causality link from government final consumption expenditure to Natural resources revenue and from Natural resources revenue to capital formation. These empirical results mean that Sub-Saharan African countries apply bad fiscal policy to improve the natural resource sector which does not efficiently contribute to the economic growth. This study suggests that countries of Sub-Saharan Africa must apply improved fiscal policy in order to add tax revenue to their total revenue; and they must also use the natural resources revenue in order to invest in other sectors such as education, manufacturing and agriculture.
JEL codes:
Çevik, Savaş, Ay, Ahmet, Baoua, Mahamane Moutari Abdou (2017). "Natural Resources Revenue, Fiscal Policy and Economic Growth: Panel Data Analysis for Sub-Saharan Africa Countries" in Proceedings of International Conference of Eurasian Economies 2017, pp.59-65, Bishkek, KYRGYZSTAN.
DOI: https://doi.org/10.36880/C09.02005
