Fiscal Policy and Economic Growth in Sub-Saharan African Countries: A Systematic Review

Ayana DI

Published on: 2022-01-13


The linkage between fiscal policy and economic growth has attracted the attention of empirical investigators in economic literatures. This study systematically reviewed sub-Saharan African literatures just to examine the relationship between fiscal policy and economic growth. To achieve the objective of the study, 11(eleven) empirical literatures in 7(seven) Sub-Saharan African literature studied between the year 2013 and 2020 were selected. As regard to sampling, random sampling was used to enhance the representatives of the sample. The criteria for selection were the relevance of the topic and the geographical area of studies. In this procedure, the first geographical area and then studies were selected. In the second stage relevance of the studies was considered as inclusion crateria. Descriptive statistics was used for data analysis. The result shows that the studies selected for review are more interested in the long-run relationship between fiscal policy and economic growth than its short-run effect. This implies that Sub-Saharan African countries are using fiscal policy for economic growth rather than stabilization. Regarding consensus on the relationship between the two variables, majority of the literature selected for review found that fiscal policy is positively and significantly affecting the economic growth of the Sub-Saharan African countries. The major fiscal policy tools used in the selected literature are government expenditure and tax reflecting the similarity of economic structures and compositions in sub-Saharan Africa. In conclusion, the compositions of fiscal policy instruments are almost similar in sub-Saharan Africa. The policy implication is that policymakers in sub-Saharan Africa should give due attention to the composition of fiscal policy tools.