Date of Award

1-5-2007

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Dr. Sally Wallace - Chair

Second Advisor

Dr. Carrie L. Manning

Third Advisor

Dr. William J. Smith

Fourth Advisor

Dr. Mary Beth Walker

Fifth Advisor

Dr. James R. Alm

Sixth Advisor

Dr. Roy W. Bahl

Abstract

The objective of this dissertation is to test empirically whether fiscal policy mimicking exists in developing countries and whether such mimicking leads to policy harmonization. This is done by studying the Southern African Development Community (SADC) Region and Sub-Saharan Africa (SSA). The dissertation uses panel data and applies the generalized method of moments (GMM) and the generalized spatial two-stage least squares (GS2SLS) methodologies to a spatial setting to test for the spatial interactions. The study also tests for evidence of spatial interaction in the assessment of government efficiency by voters in neighboring countries, where efficiency is measured using the price/quantity ratio of public goods provision. We find evidence of fiscal policy copycat behavior in both the SSA and SADC regions and mimicking is also present in some tax revenues as well as in expenditure levels. This leads us to conclude that there is some form of fiscal harmonization taking place in these developing countries. We also find evidence of spatial interaction in the assessment of governments’ efficiency in the provision of public goods. Overall, we conclude that there is evidence of some fiscal mimicking behavior as a developing world phenomenon.

Included in

Economics Commons

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