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Key Drivers of Public Debt Levels: Empirical Evidence from Africa

Authors: Seth Nana Kwame Appiah-Kubi; Karel Malec; Joseph Phiri; Mikhail Krivko; Kamil Maitah; Mansoor Maitah; Luboš Smutka;

Key Drivers of Public Debt Levels: Empirical Evidence from Africa

Abstract

The rising public debt level in Africa and the sustainability of that debt remains an important research agenda. As such, understanding the factors that impact the rising public debt level in Africa remains an important research agenda. Our paper investigates the key determining drivers that have a direct and indirect impact on the rising level of public debt in Africa from a panel of 47 African nations for the period 2000–2018. Using the generalized method of moments (GMM) and fixed effects two-stage least squares (IV-FE) methodological approach the study confirms that a rise in the corruption level leads to an increase in the public debt in Africa. Our findings additionally indicate that government investment enhances the positive and significant association with public debt levels in the sampled countries. Our result revealed that government consumption and tax revenue have a significant negative relationship with the levels of public debt in Africa. Lastly, our results showed that military expenditure has a positive but insignificant relationship with public debt levels in Africa. In terms of policy recommendation, the study suggests African countries should intensify the fight against corruption and strengthen political and governance institutions that will help reduce public debt levels and promote economic growth and development.

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Keywords

corruption; public debt; government investment; government consumption; military expenditure; tax revenue, Environmental effects of industries and plants, corruption, TJ807-830, military expenditure, TD194-195, tax revenue, Renewable energy sources, government consumption, Environmental sciences, government investment, public debt, GE1-350

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    citations
    This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    11
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Top 10%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    Average
    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
    Top 10%
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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
11
Top 10%
Average
Top 10%
gold