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Addis Ababa University Libraries Electronic Thesis and Dissertations: AAU-ETD! >
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Thesis - Economics >
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http://hdl.handle.net/123456789/2001
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| Title: | THE ANALYSIS OF BEHAVIOR OF PRIVATE INVESTMENT IN RESPONSE TO FISCAL POLICY CHANGES IN SUB-SAHARAN AFRICA |
| Authors: | FIKRU, DEBELE |
| Advisors: | Dr. C. Panda |
| Copyright: | Aug-2007 |
| Date Added: | 2-May-2009 |
| Publisher: | Addis Ababa University |
| Abstract: | Despite the belief that fiscal policy can influence both economic growth and private
investment., attempts like the Structural Adjustment Program and Poverty Reduction
Strategic Papers have not yet brought that much promising results in Sub- Saharan Africa. If
so, Can policy makers help enhance the performance of private investment in the region
through fiscal policy changes? In an attempt to answer this question, annual panel data for the
period 1986- 2003 for twenty three countries in the region was utilized. The data set depicted
the persistence of heterogeneity among the countries. The fixed effects model was applied
based on the specification tests. The regression output indicated that private investment is
positively responsive to previous period fiscal policy measures, per capita GDP and its growth
rate. However, current period fiscal policy measures, domestic credit to the private sector, real
exchange rate, inflation, and the size of government control in the exchange rate market
appeared insignificant in affecting private investment in the region. Debt servicing
significantly and negatively discouraged private investment, while debt stock was not found
doing so. The conclusion is that previous period policy measures are more influential in
promoting private investment in Sub Saharan Africa. A high debt servicing reduces resource
availability for domestic investment immediately than huge external debt stock, whose
repayment may be cancelled, at least based on conditions, as observed in HIPCs case.
Key words: - Fiscal policy, panel estimates, private investment, Sub- Saharan Africa |
| Description: | A Thesis Submitted to the School of Graduate Studies of Addis
Ababa University in Partial Fulfillment of the Requirement for the
Degree of Master of Science in Economics
(Economic Policy Analysis) |
| URI: | http://hdl.handle.net/123456789/2001 |
| Appears in: | Thesis - Economics
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