Public Financial Management and Fiscal Outcomes in Sub-Saharan African Heavily-Indebted Poor Countries

Abstract

This paper examines, in a formal econometric framework, the linkagesbetween public financial management and fiscal outcomes in sub-SaharanAfrican countries. Similar analyses have been done for Latin America,Europe, and the United States, but none in the context of low-incomecountries. Using public financial management indicators, as measuredin two recent assessments related to the Heavily-Indebted Poor CountriesInitiative, this study shows that improving public financial managementleads to better fiscal outcomes, as measured by the overall fiscalbalance and external debt levels, after controlling for other characteristicsthat might alter fiscal outcomes.