A FLOW-OF-FUNDS MODEL OF FISCAL BEHAVIOR IN NIGERIA

In this article, we set out to explore another way of evaluating the reaction functions of the fiscal authority by building upon the existing studies on this subject. To this end, a (systems) flow-of-funds model is suggested, formulated and estimated, employing annual data for the Nigerian fiscal authority over the period 1968 to 1982. We have not only ''succeeded'' in the exploration but we have also arrived at some empirical findings. In particular, we have found that the conventional policy goals (except the modern sector employment) do not appear to feature prominently in aggregate fiscal policy execution. Instead, financial and ideological factors are found to be the major determinants of the fiscal policy.