The impact of budgetary and political institutions on fiscal cyclicality: Evidence from Egypt-Reference-Cited by-同舟云学术

The impact of budgetary and political institutions on fiscal cyclicality: Evidence from Egypt

Published:2021 Issue:3 Volume:10 Page:72-84
ISSN:2306-6784
Container-title:Journal of Governance and Regulation
language:en
Short-container-title:JGR

Author:

El-Khishin Sarah¹^ORCID,Zaky Mohamed²^ORCID

Affiliation:

1. The British University in Egypt, Cairo, Egypt

2. Cairo University, Cairo, Egypt

Abstract

We investigate the cyclicality of fiscal policy in Egypt during the period of 1976–2019 with a focus on how budgetary and political institutions affect fiscal performance during economic cycles. We define new variables for budgetary and political institutions and incorporate them in a vector error correction model (VECM) and impulse response functions (IRFs) analysis. While current and capital spending are proven to behave procyclically, revenues respond countercyclically during business cycles. Poor political and budgetary institutions have a negative impact on the primary deficit in a way that led to procyclical behaviour in fiscal policy in the long run. We recommend reinforcing the Golden Rule and changing the nature of the electoral system to a party-based to strengthen the role of parliament in keeping the government accountable

Publisher

Virtus Interpress

Subject

Strategy and Management,Public Administration,Economics and Econometrics,Finance,Business and International Management

Link

https://virtusinterpress.org/IMG/pdf/jgrv10i3art6.pdf

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