Portal de Periódicos da CAPES

GOVERNMENT REVENUES AND EXPENDITURES IN GUINEA-BISSAU: CAUSALITY AND COINTEGRATION

2005; Volume: 30; Issue: 1 Linguagem: Inglês

2636-0578

Francisco Carneiro, Jo�ão Ricardo Faria, Boubacar Sid Barry,

Local Government Finance and Decentralization

The paper establishes empirically the temporal causality and long run relationship between government expenditures and government revenues for the case of Guinea-Bissau - a low income country under stress (LICUS) in Africa. A macroeconomic model is developed to lay out the hypothesis of a spend-tax behavior in the countryi¯s public finances management system. Empirical validation is carried out by means of a traditional Granger-causality test and the estimation of an error correction model between expenditures and revenues.