Budgeting for the Demographic Dividend in Senegal : the Case of the ‘Institution’ Budget Function

Pierre A. M. Ndiaye, Economist
Boubacar Diallo, DR
Edmée Marthe Ndoye, MRS

Governance, and in particular the quality of institutions, appears to be a key factor in a country's economic development. In Senegal, there have been major political changes since independence in 1960. According to the Mo Ibrahim Index of Governance, Senegal will rank 9th out of 54 African countries in 2021, with a score of 62.4 out of 100, higher than the continental average (48.9) and the regional average in West Africa (52.5). The aim of this study is to link the DDMI index to the budget function dedicated to institutions, using a macro-budgetary model and calculating budget elasticities. The results show a negative elasticity of -0.281 between the DDMI_Institutions and the budget allocated to institutions, suggesting inefficiency in the use of resources or a budget overload. On the other hand, analysis of specific expenditure reveals that investments reduce the DDMI_Institutions by -0.181, while transfer expenditure increases it by +0.980. These results underline the importance of strategic and effective budget allocation in improving governance, while highlighting the contrasting impact of the different categories of public spending on Senegal's institutional performance.

Keywords: Economic Demography, Population and Development, Econometrics

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