Government Spending in Africa: a Retrospective of the 1980s

This article investigates government spending in Africa during the 1980s, a particularly tough decade for African economies. Stabilization and structural adjustment programmes often resulted in severe reductions of government spending. Even in several countries that did not implement formal stabilization or structural adjustment programmes, economic hardship often led to declining resource availabilities for government programmes. Regression methods, and especially a fixed-effect model, are used to sort out spending behaviour arid help to determine that 1) rising interest obligations tended to 'crowd out' other types of spending, 2) capital spending has often been cut more than recurrent spending when overall spending has been tight or declining, 3) wage spending, in some instances, has been 'protected' while spending on supplies has been reduced, although this is far from a general finding, and 4) contrary to common belief, military spending has been cut more than other types of spending. In addition, spending on agriculture has been protected despite severe spending reductions in other functional categories.