PhD Defence: Moulaye Bamba

Four Essays on Fiscal Policy and Public Spending Management

Jury

Jean-Louis Combes, Professeur, Université Clermont Auvergne
Alexandru Minea, Professeur, Université Clermont Auvergne
Cécile Couharde, Professeur, Université Paris Nanterre
Marcel Voia, Professeur, Université d’Orléans
Abebe Dadi, Practice Manager, World Bank
Samba Mamadou, Directeur Général, Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO)
Ugo Panizza, Professeur, Graduate Institute Geneva
Mary-Françoise Renard, Professeur, Université Clermont Auvergne

Abstract

This thesis examines critical questions related to the interaction between fiscal policy, financing sources and public spending management. While the chapter 2 reviews the macroeconomic impacts of fiscal consolidations on developed and emerging countries, chapter 3 investigates the contributions of fiscal adjustments to efficiency gains. Chapter 4 assesses the efficiency of government investment in WAEMU countries and unveils the effects of the financing sources on public spending management. Finally, chapter 5 estimates fiscal multipliers for African countries using new structural macroeconomic models. These four chapters highlight interesting results. In chapter 2, the findings provide evidence of the contraction of public investment more than that of government consumption. This composition effect is stronger during high debt distress, low phase of business cycle and following debt and stock market crises. Chapter 3 shows that the implementation of fiscal consolidations induce significant improvement in public investment efficiency. Robust to a wide range of alternative specifications, huge public investment efficiency gains arise during economic slack, with a policy mix and high perceived sovereign default risk as well as with the support of IMF programs. Focusing on WAEMU countries, chapter 4 shows that countries in this zone are less efficient than that of African and Asian peer countries. In addition, the chapter finds that external (domestic) debt positively and significantly (not significant enough) impacts the probability to have good public management due to conditionality. This indicates that there is room for domestic and/or regional debt to boost efficiency if domestic debt become more competitive. Chapter 5 suggests that South Africa multipliers are positive and small using the New Keynesian DSGE model. The chapter also finds a crowding-out effect between government purchases and investment and private consumption.

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