Budget balance through revenue or spending adjustments? An econometric analysis of the Ivorian budgetary process, 1960 - 2005

Yaya Keho

Ecole Nationale Supérieure de Statistique et d’Economie Appliquée (ENSEA) Abidjan-Côte d’Ivoire. 08 BP 03 Abidjan 08, Côte d’Ivoire. E-mail: yayakeho@yahoo.fr. Tel: (+225) 22 44 41 24. Fax: (+225) 22 48 51 68.

Accepted 28 November, 2009

   Abstract

This paper uses annual data for the period of 1960 - 2005 to investigate the causal relationship between government revenues and spending in Côte d’Ivoire. The empirical findings reveal a positive long-run unidirectional causality running from revenues to expenditures. This implies that achieving fiscal consolidation should focus more on reducing government spending rather than raising revenues.

Key words: Government expenditures, government revenues, cointegration, causality, Côte d’Ivoire.

JEL classification: E62 ; H61 ; C32.