@techreport{Fosu2007external,
abstract = {The paper explores the impact of a binding external debt-servicing constraint on the  sectoral composition of government expenditures in the economies of Africa, where this  constraint has traditionally been most prevalent. Applying seemingly unrelated  regression (SUR) to 1975-94 five-year panel data for 35 countries, the paper finds that  the implied debt service burden adversely affects the share of public spending in the  social sector, with similar impacts on education and health. Despite evidence that such a  burden might also negatively influence public investment, the deleterious implications  of debt servicing appear to be primarily a social-sector phenomenon. The partial  elasticity on the sector's expenditure share is estimated at 1.5, which is by far the  highest among all the explanatory variables considered, including external aid, whose  estimated effect on the social sector is positive but with an elasticity of only 0.2. Aid  also positively affects public investment with a similar elasticity of 0.2. Constraint on  the executive exercises significant positive and negative impacts, respectively, on capital and agricultural spending, and also appears to positively influence health  expenditure. In addition, expenditures in the social sector have been tending upward,  despite the structural adjustment programmes of the 1980s, and even prior to the Highly  Indebted Poor Countries (HIPC) Initiatives that have tended to emphasize spending in  the social sector.},
address = {Helsinki},
author = {Augustin Kwasi Fosu},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
isbn = {9291909793=978-92-9190-979-7},
keywords = {F34; H50; 330; external debt servicing; public expenditure composition; seemingly unrelated  regression; African economies; Auslandsschuldendienst; \"{O}ffentliche Ausgaben; Afrika},
language = {eng},
number = {2007/36},
publisher = {UNU-WIDER},
title = {The external debt-servicing constraint and public expenditure composition: Evidence from African economies},
type = {Research Paper, UNU-WIDER, United Nations University (UNU)},
url = {http://hdl.handle.net/10419/63373},
year = {2007}
}
