AFRICAN JOURNAL OF ECONOMICS AND FINANCIAL ISSUES

This work focuses on measuring the relative effectiveness of fiscal policy on economic growth. The objective of this research is to analyze the impact of fiscal policy on economic growth in the UEMOA zone, covering the period from 2000 to 2023.The research is carried out from two angles, using two models: Dynamic panel linear growth model: This model makes it possible to analyze the impact of fiscal policy on economic growth, and to show whether there is a reversal effect of fiscal policy on the growth rate through the budget balance variable. González PSTR model: This model is used to test the existence of non-linearity and to determine budget deficit and debt thresholds in the WAEMU zone. Analyzing the impact of fiscal policy on growth using the linear model, the results show that the budget balance has a negative impact on economic growth in the UEMOA zone. According to the estimation results, the optimal threshold for good debt sustainability is estimated at 65.57% of GDP. With regard to the budget deficit threshold, estimates carried out on a panel of eight WAEMU countries reveal a budget deficit threshold not exceeding 5.1% of GDP. Nevertheless, our study identifies Benin, Côte d’Ivoire, Niger, Senegal and Togo as the best current candidates for adoption into the future monetary union, based on fiscal discipline.

Keywords: efficiency, fiscal policy, economic growth, GMM, PSTR
JEL Classification: C23, E62, O47