Acta Universitatis Danubius. Œconomica, Vol 15, No 1 (2019)

Fiscal Health and Developmental Outcomes in Brics Nations: New Answers to Old Questions

Gabriel Olusegun Oduyemi, Kunle Bankole Osinusi, Ibrahim Ayoade Adekunle

Abstract


Insufficient and inefficient use of state resources amidst growing state budgetary expenditure has ensured that developmental outcomes in BRICS nations are kept at bay. Despite the one-time tremendous growth of the BRICS nations, stakeholders, policy makers, financial institutions and the society at large are concerned about the disruption in what has been an upward trend in growth and development activities of the BRICS nations. This paper examined the structural relationship between fiscal health and developmental outcomes of BRICS nations with the aim of coming up with the evidence-based prediction of development outcomes of BRICS nations as induced by fiscal irregularities. Findings reveal that debt to GDP ratio, government revenue, the ratio of cost of debt service to revenue, and welfare standard of the populace induces developmental outcomes in BRICS nations in the short-run. Based on the findings, we recommend concerted and prudent fiscal actions should be undertaken to ensure fiscal balance needed to guarantee sustained developmental outcomes in the BRICS nations.

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