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Institutions and Macroeconomic Policies in Resource-Rich Arab Economies$
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Kamiar Mohaddes, Jeffrey B. Nugent, and Hoda Selim

Print publication date: 2019

Print ISBN-13: 9780198822226

Published to Oxford Scholarship Online: July 2019

DOI: 10.1093/oso/9780198822226.001.0001

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The Political Economy of Fiscal Institutions and Macroeconomic Management in Sudan

The Political Economy of Fiscal Institutions and Macroeconomic Management in Sudan

Chapter:
(p.275) 10 The Political Economy of Fiscal Institutions and Macroeconomic Management in Sudan
Source:
Institutions and Macroeconomic Policies in Resource-Rich Arab Economies
Author(s):

Kabbashi M. Suliman

Publisher:
Oxford University Press
DOI:10.1093/oso/9780198822226.003.0010

This chapter draws on the literature on historical institutionalism and distributive politics, combining qualitative and quantitative information from Sudan’s territorial economic structures, to highlight the evolution of the fiscal and political institutions and indicate their impact on fiscal policy and macroeconomic outcomes. The results show that the inherited colonial fiscal institutions, underpinned by cotton production partnership, significantly determined Sudan’s economic development path after independence and facilitated the incorporation of rural areas and communities into the national economy. However, the greater centralization of power to boost the elites’ legitimacy, including the prioritization of public expenditures on entrenched and inefficient political patronage networks, have not only undermined the macroeconomic management role of the fiscal policy, but also triggered a process of territorial fragmentation that escalated into open civil wars and eventually led to the breakup of the state. The policy implications of these findings are outlined.

Keywords:   fiscal institutions, fiscal policy, political patronage, macroeconomic stability, fiscal solvency, cotton, Sudan

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