Determinants of fiscal policy behavior in Nigeria

Due to a huge financing gap in many developing nations, governments use budget deficit to facilitate growth and development. However, deficit financing deepens the economic woes of these economies, leaving them in a vicious cycle of deficits. In Nigeria, for instance, fiscal deficits cause country’s bad performance and ranking both in global growth and development indicators. Thus, the use of fiscal deficit to enhance economic performance has proved to be futile and also has left bad economic consequences. Based on the econometric method of Autoregressive Distributed Lag, this study examines how selected macroeconomic indicators influence fiscal deficits in the budgetary policy of Nigeria. Historical data between 1981 and 2017 were used for the study. The study shows a significant positive effect of inflation, oil revenue, and lagged exchange rate on fiscal deficits. There is also evidence that external debt and current exchange rate decrease the level of fiscal deficits. However, the research did not prove robust evidence of fiscal deficit persistence. Government policy should target low level of inflation and exchange rate appreciation as well as the productive investment of oil revenues and economic diversification as the panacea for persistent use of fiscal deficits.

This study determines the causal relationship that exists between government revenue and government expenditure in South Africa. The study employed annual time series data from the year 1980 to 2015 taken from the South African Reserve Bank. The Johansen multivariate method was employed to test for co-integration and for causality the Vector Error Correction/Granger causality test was employed. The empirical results suggest that there is a long-run relation-ship between government revenue and government expenditure. The causality result suggests that there is no causality between government revenue and government expenditure in South Africa. Thus, policy makers in the short run should determine government revenue and government expenditure of South Africa independently when reducing the budget deficit.

The low level of the nation’s health and physical activity highlights the need to find additional mechanisms for the development of the sports sphere, one of which is to increase its financing. This paper aims to investigate how an increase in general government expenditure on recreation and sports affects sports entrepreneurship (turnover or gross premium written in the sports industry; value added at factor cost of sports enterprises; sports industry market size) and the share of the population involved in sports (as an indicator characterizing the development of sports). The study used the panel unit root test and fixed and random effects models. Modeling proved that the increase in general government expenditure on recreation and sports by 1% largely determines the increase in value added at factor cost of sports enterprises (by 5.48%). A significantly less effect is for turnover or gross premium written in the sports industry (by 0.85%), and the smallest is for the sports industry market size (by 0.4%). A 1% increase in general government expenditure on recreation and sport has the greatest impact in the Czech Republic (by 2.37%) and Slovakia (by 2.44%) and the least – in Australia (by 0.4%). The share of the population involved in sports is almost independent of general government expenditure on recreation and sports in all 10 OECD countries.