Tax-Spend or Spend-Tax? The Case of Southern Africa
| dc.contributor.author | Nzimande, Ntokozo Patrick | |
| dc.contributor.author | Ngalawa, Harold | |
| dc.date.accessioned | 2022-04-23T10:51:43Z | |
| dc.date.available | 2022-04-23T10:51:43Z | |
| dc.date.issued | 2022-04-06 | |
| dc.date.updated | 2022-04-21T21:03:50Z | |
| dc.description.abstract | Whether to increase taxes or cut spending is an important question with profound policy implications, especially as countries attempt to deal with the consequences of the COVID-19 pandemic. This study, therefore, investigated the relationship between revenues and spending in the Southern African Development Community (SADC), where concerns about rising debt and deficits were raised prior to the pandemic. A panel bootstrap Granger-causality technique was used to analyze annual frequency data covering the 1980–2018 period. To our best knowledge, this was the first study in Africa to simultaneously account for cross-country differences and cross-section dependence. The findings of the study have in-depth implications for fiscal policy and adjustments towards budgetary equilibria. The study found no evidence of causality between revenues and spending in eleven SADC member states, suggesting that to balance their respective budgets, governments in these countries can alter either spending or revenues, or both. However, in Botswana, we found evidence of the tax-spend hypothesis, implying that governments should consider altering revenues to eliminate budget imbalances. Finally, evidence of the spend-tax hypothesis was found in Mauritius and Mozambique, suggesting that past and current expenditures drive revenues in these countries. Accordingly, cutting spending would be an ideal policy recourse to deal with budgetary disequilibrium. | en_US |
| dc.identifier | doi: 10.3390/economies10040085 | |
| dc.identifier.apacitation | Nzimande, N. P., & Ngalawa, H. (2022). Tax-Spend or Spend-Tax? The Case of Southern Africa. <i>Economies</i>, 10(4), 85. http://hdl.handle.net/11427/36383 | en_ZA |
| dc.identifier.chicagocitation | Nzimande, Ntokozo Patrick, and Harold Ngalawa "Tax-Spend or Spend-Tax? The Case of Southern Africa." <i>Economies</i> 10, 4. (2022): 85. http://hdl.handle.net/11427/36383 | en_ZA |
| dc.identifier.citation | Nzimande, N.P. & Ngalawa, H. 2022. Tax-Spend or Spend-Tax? The Case of Southern Africa. <i>Economies.</i> 10(4):85. http://hdl.handle.net/11427/36383 | en_ZA |
| dc.identifier.ris | TY - Journal Article AU - Nzimande, Ntokozo Patrick AU - Ngalawa, Harold AB - Whether to increase taxes or cut spending is an important question with profound policy implications, especially as countries attempt to deal with the consequences of the COVID-19 pandemic. This study, therefore, investigated the relationship between revenues and spending in the Southern African Development Community (SADC), where concerns about rising debt and deficits were raised prior to the pandemic. A panel bootstrap Granger-causality technique was used to analyze annual frequency data covering the 1980–2018 period. To our best knowledge, this was the first study in Africa to simultaneously account for cross-country differences and cross-section dependence. The findings of the study have in-depth implications for fiscal policy and adjustments towards budgetary equilibria. The study found no evidence of causality between revenues and spending in eleven SADC member states, suggesting that to balance their respective budgets, governments in these countries can alter either spending or revenues, or both. However, in Botswana, we found evidence of the tax-spend hypothesis, implying that governments should consider altering revenues to eliminate budget imbalances. Finally, evidence of the spend-tax hypothesis was found in Mauritius and Mozambique, suggesting that past and current expenditures drive revenues in these countries. Accordingly, cutting spending would be an ideal policy recourse to deal with budgetary disequilibrium. DA - 2022-04-06 DB - OpenUCT DP - University of Cape Town IS - 4 J1 - Economies KW - SADC KW - revenues KW - starve the beast KW - deficits LK - https://open.uct.ac.za PY - 2022 T1 - Tax-Spend or Spend-Tax? The Case of Southern Africa TI - Tax-Spend or Spend-Tax? The Case of Southern Africa UR - http://hdl.handle.net/11427/36383 ER - | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11427/36383 | |
| dc.identifier.vancouvercitation | Nzimande NP, Ngalawa H. Tax-Spend or Spend-Tax? The Case of Southern Africa. Economies. 2022;10(4):85. http://hdl.handle.net/11427/36383. | en_ZA |
| dc.language.iso | en | en_US |
| dc.publisher.department | School of Economics | en_US |
| dc.publisher.faculty | Faculty of Commerce | en_US |
| dc.rights.uri | http://creativecommons.org/licenses/by/4.0/ | en_US |
| dc.source | Economies | en_US |
| dc.source.journalissue | 4 | en_US |
| dc.source.journalvolume | 10 | en_US |
| dc.source.pagination | 85 | en_US |
| dc.source.uri | https://www.mdpi.com/journal/economies | |
| dc.subject | SADC | |
| dc.subject | revenues | |
| dc.subject | starve the beast | |
| dc.subject | deficits | |
| dc.title | Tax-Spend or Spend-Tax? The Case of Southern Africa | en_US |
| dc.type | Journal Article | en_US |