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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Tax-and-spend, spend-and-tax, or fiscal synchronization? Evidence from Burundi
Author:Ndoricimpa, ArcadeISNI
Periodical:Cahier du CURDES
Geographic term:Burundi
public expenditure
Abstract:The present paper applies Granger causality tests based on Toda-Yamamoto procedure and VECM (Vector Error Correction Model) framework, to determine the relationship between government spending and government taxes in Burundi using recent monthly data during the period 1996-2009. The empirical analysis discoverd a firm positive unidirectional causality from government tax to government spending, supporting Friedman's (1978) version of the tax-and-spend hypothesis for Burundi. The empirical findings suggest, therefore, that in Burundi unsustainable budget deficits can be mitigated by policies that cut government taxes. Bibliogr., sum. [Journal abstract]