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

Journal of Governance and Regulation

article

SarahEl-Khishin¹  MohamedZaky² 

[1] The British University in Egypt;Cairo University

关键词: Fiscal Cyclicality;    Budgetary Institutions;    Political Institutions;    Business Cycles;    Electoral Systems;    Principal Agent;    Common Pool;   

DOI  :  10.22495/jgrv10i3art6

学科分类：社会科学、人文和艺术（综合）

来源: Virtus Interpress

【 摘 要 】

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.

【 授权许可】

CC BY-NC