Do Independent Central Banks Exhibit Varied Behaviour in Election and Non-Election Years?: The Case of Fiscal Policy in Africa

Do Independent Central Banks Exhibit Varied Behaviour in Election and Non-Election Years?: The Case of Fiscal Policy in Africa

Author: 
Agoba, Abel Mawuko
Place: 
Oxon
Publisher: 
Taylor & Francis Group
Date published: 
2020
Record type: 
Region: 
Responsibility: 
Abor, Joshua Yindenaba, jt. author
Osei, Kofi Achampong, jt. author
Sa-Aadu, Jarjisu, jt. author
Journal Title: 
Journal of African Business
Source: 
Journal of African Business Vol 21 No 1 2020 pp. 105-125
Abstract: 

The study primarily investigates if the behavior and effectiveness of CBI on fiscal policy varies between non-election and election years. It also examines whether the effectiveness of CBI in improving fiscal performance is enhanced by higher institutional quality. Using recent CBI data f on 48 African countries, 90 other developing countries and 40 developed countries over the period 1970-2012, we apply a two-stage system GMM with Windmeijer small sample robust correction estimator and find that due to the strong incentives of political authorities to influence economic outcomes in election years, CBI has stronger effects on fiscal performance in election years compared to non-election years in developed countries only. However, given higher levels of institutional quality, CBI has stronger effects on fiscal performance in election years compared to non-election years in Africa and other developing countries also.

Language: 

CITATION: Agoba, Abel Mawuko. Do Independent Central Banks Exhibit Varied Behaviour in Election and Non-Election Years?: The Case of Fiscal Policy in Africa . Oxon : Taylor & Francis Group , 2020. Journal of African Business Vol 21 No 1 2020 pp. 105-125 - Available at: http://library.au.int/do-independent-central-banks-exhibit-varied-behaviour-election-and-non-election-years-case-fiscal