MACROMODELOPERATIONALMANUAL Oct09 2005

Operational Manual for
A Macroeconomic Framework
for Quantifying Growth and Poverty
Reduction Strategies in Niger
Nihal Bayraktar* and Emmanuel Pinto Moreira**
First complete draft: February 2, 2005
This version: October 09, 2005
Abstract
This operational manual provides detailed information on the simulation of a
macroeconomic model linking aid, public investment (disaggregated into
education, health, and infrastructure), and growth, developed by Agnor,
Bayraktar, and El Aynaoui (2005) and applied to Niger by Pinto Moreira and
Bayraktar (2005). The manual explains how the model is specified, the
parameters are calibrated, and the program is run. It also explains the
different steps to follow to introduce policy shocks, analyze the output
table, and derives policy implications. In order to help readers not familiar
with Eviews to get started, we provide some basic information on EViews
4.0.
*Penn State University - Harrisburg and World Bank. E-mail address: nxb23@psu.edu.
**World Bank.
Table of Contents
I. INTRODUCTION
II. INPUT DATA FILE
III. PARAMETERS
1. Econometric Estimation of Some Parameters
2. Given Parameter Values
3. The Parameter Calibration Part of the Program
IV. EXOGENOUS VARIABLES PROJECTED WITHIN THE PROGRAM
V. CALCULATION OF RESIDUALS TO EQUATE ESTIMATED VARIABLES WITH THEIR
ACTUAL VALUES
VI. PARTIALLY ADJUSTED VARIABLES
VII. THE SIMULATION PROGRAM
1. How to Install the Simulation Package
2. The Setup of the Simulation Package
3. Details about the EViews Simulation Program
3.1. The Basic Information about Running the Program in EViews
3.2 EViews Commands Used in the Program
4. Details about the Excel Output Files
5. Details about the Summary Table File
VIII. Simulating Shocks
SHOCK 1 - Increase in Foreign Aid
SHOCK 2 - Reallocation of Public Investment
SHOCK 3 - Reduction in Tariffs
The Non-Neutral Case Shock 3a
The Neutral Case: Adjustment in Direct Taxation Shock 3b
The Neutral Case: Adjustment in Indirect Taxation Shock 3c
IX. SENSITIVITY ANALYSIS
X. LINKING THE MODEL WITH THE MILLENNIUM DEVELOPMENT GOALS
XI. LINKING THE MODEL WITH THE DECOMPOSITION OF PUBLIC CAPITAL
EXPENDITURE TABLE
APPENDIX A Definitions
APPENDIX B List of Variables and Parameter Estimates
APPENDIX C Estimation Results
APPENDIX D EViews Commands Used in the Program and Their Meanings
APPENDIX E List of Equations
APPENDIX F Simple Example Model
APPENDIX G Tables of Simulation Results
APPENDIX H Calculation of Variables and Projection of Exogenous Variables
I. INTRODUCTION, BACKGROUND, and OBJECTIVES

Pinto Moreira and Bayraktar (2005) applied a macroeconomic model which
analyzes the linkages between aid, public investment, and growth developed by
Agnor, Bayraktar, and El Aynaoui (2005) to Niger.1 The macroeconomic model has
been simulated using the software Eviews 4.0. The simulation program has been
used to create the baseline results and to investigate the effects of alternative policy
shocks on the economy, including an increase in aid/GDP ratio, a reallocation of
public investment toward investment in infrastructure, and neutral and non-neutral
reduction in effective tariff rate.
The objectives of this operational manual is twofold: (i) help the user of the
Nigers model understand the technical aspects of the modeling exercise carried out
in Niger and, (ii) familiarize a reader interested in macro-modeling with some basics,
including modeling procedure, methods, and requirements using the Nigers model
as an example.
The remainder of the manual is organized as follows. Section II presents
information on the input data file. Section III describes the calculation procedures and
methods used to compute the parameters used in the model. Section IV, presents
the methods used to project exogenous variables within the model. Section V
explains how the residuals are defined. Section VI describes the procedure of
introducing partially adjusted variables in the model. Section VII presents detailed
information about the simulation program written in Eviews 4.0. Section VIII describes
how shocks are run in the model. Section IX concludes.
PRELIMINARY REMARKS TO GET STARTING
Required Programs and the Files in the Package
Two software programs are required to run this simulation program:
This paper applies the dynamic macroeconomic framework developed originally by Agnor,
Bayraktar, and El Aynaoui (2005) to Niger.
(a) EViews Version 4 or higher2.

(b) Microsoft Excel.
Four different files are used to simulate the model. .

a. Niger-Data.xls Excel data file: This is the input data file. It contains
initial values of both exogenous and endogenous variables, and
projections for exogenous variables.
b. Niger-Simulation.prg EViews program file: This file is used to run the
simulation program.
c. Niger-output.xls Excel data file: It reports the simulation results
created by Niger-Simulation.prg. The names of the output files are
OUTPUT-NIGER.xls for the baseline output data; OUTPUT-NIGERSHOCK1.xls presenting the Shock 1 output data; OUTPUT-NIGERSHOCK2.xls presenting the Shock 2 output data; OUTPUT-NIGERSHOCK3A.xls presenting the Shock 3A output data; OUTPUTNIGER-SHOCK3B.xls
presenting
the
Shock
3B
output
data;
OUTPUT-NIGER-SHOCK3C.xls presenting the Shock 3C output

data.
d. Niger-table.xls Excel data file: This table summarizes the simulation
results. The names of the output files are NIGER-Output Table BASELINE.xls for the baseline summary table; Niger-Output TableSHOCK1.xls for Shock 1 summary table; Niger-output-Aid-ShockTable 4.xls presenting the deviation of the Shock 1 values from the
baseline values; Niger-Output Table-SHOCK2.xls for Shock 2
summary table; Niger-output-Aid-Shock-Table 5.xls presenting the
deviation of the Shock 2 values from the baseline values; NigerOutput Table-SHOCK3A.xls for Shock 3A summary table; Nigeroutput-Aid-Shock-Table 6.xls presenting the deviation of the Shock
3A
values
from
the
baseline
values;
Niger-Output
Table-
SHOCK3B.xls for Shock 3B summary table; Niger-output-Aid-ShockThis software is created by Quantitative Micro Software. The new versions of EViews have tools for
programming and solving simulation models.
Table 7.xls presenting the deviation of the Shock 3B values from the
baseline values; Niger-Output Table-SHOCK3C.xls for Shock 3C
summary table; Niger-output-Aid-Shock-Table 8.xls presenting the
deviation of the Shock 3C values from the baseline values; NIGEROutput Table BASELINE-table 9.xls for the baseline summary table
in case of lower public investment efficiency; Niger-Output TableSHOCK4.xls for Shock 4 summary table (aid shock with lower public
investment efficiency parameter); Niger-output-Aid-Shock-Table 10.xls
presenting the deviation of the Shock 4 values from the baseline
values.
II. INPUT DATA FILE

Data entry and Location
The input file is named as Niger-Data.xls (an Excel file). Variables in the model
are separated into two groups: exogenous and endogenous variables. While the
exogenous variables are determined outside the model, the endogenous
variables are determined inside the model.3 The values of these variables and
parameters are presented in the input file.
The location of the endogenous variables is on ENDO sheet, the exogenous

variables on EXO sheet, and the parameters on PARAM sheet. Data sources
of the variables are given in Appendix H.
While the names of the variables are reported in column A, their definitions are
given in column B. In the following columns, the data points are presented starting
from 1999. The base year is 2004 in the model. But the data file starts in 1999
due to the presence of lagged variables in the model. All data points between
1999 and 2004 are actual numbers.
Base year and Simulation period
The base year is 2004 in the model. But the data file starts in 1999 due to the
presence of lagged variables in the model. All data points between 1999 and 2004
are actual numbers.
The model is simulated for the years starting from 2004 until 2015. As
specified above, the simulated values of endogenous variables for this period are
determined within the model. But we have to project the values of exogenous
variables for these years since they are determined outside the model.4 The
projected values of exogenous variables are also reported on EXO sheet for the
years starting from 2005 until 2015. Detailed information on projections is reported in
Appendix H.
III. PARAMETERS
Three types of procedures have been used to determine the values of the
parameters in the model:
Estimation running regression equations;
Use of parameters provided in various studies as given; or,
Calibration within the model5.
1. Econometric Estimation of Some Parameters
The parameters of the three fiscal equations and private investment equation
(IP), which are listed below, are obtained by running econometric regressions. The
estimation technique is the ordinary least squares. But in order to correct for serial
correlation, the equations are estimated with autoregressive processes of order one
3
Exogenous and endogenous variables are listed in Appendix B and the list of equations is given in
Appendix E.
4
It should be noted that some exogenous variables (DB, FP, ERROR_OMM, AID, LE_G, and WG) are
projected within the model since they are projected as a constant share of endogenous variables.
5
Different types of parameters are used in Pinto Moreira and Bayraktar (2005). Their definitions are
given in Appendix A. In this appendix, we also define the production and transformation functions used
in the model.
and/or two, denoted AR(1) and AR(2) below, where needed. All regressions are
based on annual data for the period 1982-2002. The E-views program used to run
the regression equations are given in niger-regression-ig-indtxr-ip.prg. The input file
is Niger-dataset-regression-IG-IP-INDTXR.xls
The estimated equations are

INDTAX = INDTXR(INDTXR-1, AID/NGDP)PQQ
(1)
PQTIG/NGDP = IG[(TAX/NGDP)-1, AID/NGDP, (AID/NGDP)2]
(2)
PQTIP/NGDP = IP((Y/Y-1) -2, PQT*KGINF/NGDP, ERFP/NGDP).
(3)
The definitions of variables and equations are given in Appendix B and E,
successively. The estimation results are reported in Appendix C. It should be noted

that the coefficient of (TAX/NGDP)-1 in the PQTIG/NGDP equation in the model is
adjusted downward since the high value of the coefficient was causing the simulated
value of government investment, IG, to be extremely sensitive to changes in the tax
rate. Similarly, the coefficient of (AID/GDP)2 in the same equation is adjusted
downward since the higher value of the coefficient was leading IG to be less
responsive to changes in aid. The estimated coefficient of PQT*KGINF/NGDP in the
PQTIP/NGDP equation is adjusted upward to make changes in the level of public
capital stock in infrastructure more effective on private investment.
The regression results are:

INDTXR = 0.008 + 0.706*INDTXR-1 - 0.029*AID/NGDP
(2.865) (7.717)
(-2.068)
Adjusted R = 0.742; Durbin-Watson statistic = 1.861

AR(1) = -0.350 (-1.347)
PQTIG/NGDP = -0.174 + 0.649*(TAX/NGDP)-1 + 1.549*AID/NGDP
(-2.333) (3.380)
(2.363)
-3.261*(AID/NGDP)^2
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(-2.175)
Adjusted R2 = 0.553; Durbin-Watson statistic = 1.888
AR(1) = 0.527 (1.762); AR(2) = -0.420 (-1.679)
PQTIP/NGDP = 0.001 + 0.056*(Y/Y-1) -2 + 0.15*PQT*KGinf/NGDP
(0.058) (2.099)
(1.413)
+ 0.033* ERFP/NGDP -0.028* Dummy87 -0.027*Dummy92_95

(0.186)
(-3.871)
(-4.042)
Adjusted R2 = 0.710; Durbin-Watson statistic = 1.893

AR(1) = 0.829 (2.723); AR(2) = -0.353 (-1.271)
2. Imposed Parameter Values
Some of the parameters in the model are determined either by dwelling on the
scant literature for Niger, or by using plausible values for low-income developing
countries in generalincluding the estimates used by Agnor, Bayraktar, and El
Aynaoui (2005) for Ethiopia in a similar framework. The values of these parameters
are reported in the GIVEN PARAMETER VALUES section of the simulation
program.
In Eviews, all parameters must be specified as scalars. For this purpose, the
scalar command is used. The general Eviews syntax is the following:

scalar name of the parameter = its value
Example. The value of the parameter DE is introduced in the program as

follows:
scalar sigma_DE = 0.3
Some of the parameters need to be calculated using the values of other
parameters as it is the case for DE, which is a function of DE. In the program, it is
coded as follows:
scalar rho_DE = 1+(1/sigma_DE)
Elasticity of substitution
The elasticities of substitution on the production side were kept at relatively low
values. For instance, the elasticity of substitution between T and KP, J, was set to
0.3; the elasticity of substitution between LE and Kghea/POPH, T, to 0.3; and the
elasticity of substitution between J and KGinf, Y, to 0.4. Z is taken as 0.2. The
corresponding substitution parameters are calculated by using these values of
elasticity of substitution. How they are calculated is presented in the Substitution and
Transformation Parameters section of the simulation program.
Elasticity of transformation
The elasticity of transformation in domestic production was set at 0.3, whereas
the elasticity of transformation between domestic and imported goods at 0.7. The
corresponding transformation parameters are calculated in a similar way (see the
Substitution and Transformation Parameters section of the simulation program).
Shift parameter
Most of the shift parameters are calibrated within the model as explained in
detail below. However, three of them are given, including AJ, AT, AZ, and AKGZ
which are taken 1. The reason is that we need to calibrate J, T, and Z variables,
which are not empirically observable, by assigning some values to their shift
parameters.
Share parameters
Z is taken as 0.5. E has been initially calibrated, but since the calibrated
value was not proper, it is taken as 0.3. T and Y are taken as 0.85. J is
9
0.6. DM, which is equal to 0.75, is calculated as the share of DOM in the sum
of DOM and M. DE, which is equal to 0.15, is calculated as the share of X in
the sum of DOM and X.
Depreciation rates
For lack accurate information on the depreciation rate of capital stocks are
taken, the values used were taken from Agnor, Bayraktar, and El Aynaoui (2005).
The rate of depreciation of public capital (education, health, infrastructure, and other),
delta_h, is set at 0.035. The depreciation rate of the private capital stock, delta_P, is
0.06.
Congestion parameters
Parameters capturing congestion effects were difficult to estimate, given the
lack of information for developing countries in general. Since congestion effects seem
to be quite significant in Niger, we have chosen relatively high parameter values
compared to the values of congestion parameters chosen for Ethiopia in Agnor,
Bayraktar, and El Aynaoui (2005). The parameter capturing congestion effects in the
education system, theta_KGE and theta_KGI, are set at 0.9; that determining the
strength of congestion effects in the provision of health services, theta_H, at 0.4; and
for the parameter capturing congestion effects in infrastructure capital, theta_I, we
chose a value of 0.3.
The savings rate is taken as 10 percent.
3. The Parameter Calibration Part of the Program

The remaining parameters are calibrated within the model. One important
advantage of our simulation program is that this calibration is coded within our
simulation program. In this way, as the values of variables or parameters change, the
calibration of the remaining parameters will be done automatically. Thus we do not
need to use any other program. The related section in the simulation program is
PARAMETERS CALIBRATED WITHIN THE MODEL. Most of the share and shift
10
parameters are calibrated in this section. First of all, we calibrated the share
parameters, and then the shift parameters are calibrated using these values of the
share parameters.
It is worth noting that the variables that are used in calibrating parameters need
to be specified as series. In order to declare series, we use the series command
in EViews, which is followed by the name of the variable. The reason for this
transformation is that the calibrated parameters are scalar and in order to calculate a
scalar in EViews, all variables must be specified as series. The general form of this
command is
series variable name
For example, output, Y, is defined as series using the following command:

series Y
After variables are defined as series, we can refer to specific data points more
easily. For example, Y(5) means the value of Y in period 5, which corresponds to
year 2003.
KGZ is calibrated as a share of KGinf in the sum of KGinf and KGedu.
Calibration of the shift parameters
We calibrated some of the share and shift parameters of the following constant
elasticity of substitution functions.
Y(J, KGinf-1,Y-1) = AY[YJ-Y + (1 - Y)(KGinf-1/Y-1I) -Y]-1/Y
LEN = AE[E(LR-1)-E + (1 - E)(Z)-E]-1/E
In these equations, the calibrated shift parameters are AY and AE.
11
The shift parameters of the following equations are obtained by solving them for ADE
and ADM, using the given values of DE and DM.
Y = ADE[DEXDE + (1 - DE)DOMDE]1/DE
Q = ADM[DMDOM-DM + (1 - DM)M-DM]-1/DM.
The last parameter calibrated within the model is APQ, which is the shift
parameter of the composite price level, PQ.
IV. EXOGENOUS VARIABLES PROJECTED WITHIN THE PROGRAM

Projections of variables
Most of the exogenous variables are projected outside of the model using
different techniques (See Appendix H). Some exogenous variables, including the
number of educated workers in the public sector, LE_G, the wage rate in the public
sector, WG, domestic borrowing, DB, errors and omissions, ERROR_OMM, and
private capital flow, FP, are projected within the model by taking them as a constant
share of other endogenous or exogenous variables. For example, the governments
domestic borrowing, DB, is projected as a constant share of NGDP (1 % of NGDP)
within the model using the following code
niger.append DB = NGDP*0.01
The niger.append command is defined below.

Some of these constant shares are calculated using 2004 values of the
variables. For instance, errors and omissions are projected as a constant share of
GDP, where this constant share is named as ERRORGDP_const. Using this share,
12
ERROR_OMM is calculated as ERROR_OMM = ERRORGDP_const*(NGDP/ER).

Foreign aid is also projected within the model. The ratio of AID to NGDP (AID_const),
which was 0.1067 in 2004, is multiplied by NGDP to construct the aid series between
2005 and 2015. The number of educated labor in the public sector is defined as a
constant share of total number of educated labor. This ratio (LE_G_const) was equal
to 0.0191 in 2004. The share of FP in % of GDP in 2004 is 0.49 percent.
V. CALCULATION OF RESIDUALS TO EQUATE ESTIMATED VARIABLES WITH

THEIR ACTUAL VALUES
Calculation of residuals
As mentioned earlier, some of the parameters are obtained running regression
equations. The simulated values of variables such as IG are defined using these
regression results. Since it is required that all identities must hold in the base year,
we constructed residuals to equate the estimated values of variables to their actual
values in 2004. These residuals are defined for IG, INDTXR, and IP. IG regression
equation is taken as an example. While the actual value of IG in 2004 is
83,631,764,436 in LCU, the estimated value of IG is equal to
Estimated IG = (-0.174921+0.649353*(TAX(-1)/(NGDP(1)))+1.549799*(AID/NGDP)-3.26115*(AID/NGDP)^2)*NGDP/PQ.
This estimated IG is defined using 2004 values of the right hand side
variables, which is equal to 27,679,573,152 in LCU. The difference between the

actual and estimated IG is defined as residual which is equal to 55,952,191,283 in
LCU. IG_RES is the name of this residual.
The residual for INDTXR (INDTXR_RES = 0.005) is calculated by taking the
difference between the actual and estimated values of INDTXR in 2004:

INDTXR_RES = Actual value of INDTXR [0.00792+0.706572*INDTXR(-1)0.029834*(AID/NGDP)]
13
Another residual is calculated for private investment, IP, using regression

results. IP_REGRES is equal to 110,380,533,916 in LCU and calculated as
IP_REGRES = Actual value of IP [(0.001554 + 0.056452*((Y(-2)-Y(-3))/Y(3))+0.15304*(PQT*KGINF/NGDP)+0.033393*(ER*FP/NGDP))*NGDP/PQT]
In addition to these residuals, we also defined one more residuals for AID
variable in order to make identities hold in the base year.
The data source of foreign aid is OECD, which can be considered a reliable
source. But the values of this series are different from the one reported in the balance
of payment table prepared by IMF. For the balance of payments to hold, we define a
residual which equates the values of foreign aid from these two sources. This
residual is obtained by subtracting the values of AID from the balance of payment
tables from the values of AID taken from OECD sources. AID_RES is equal to $225,407,778. This residual is used to calculate the change in net foreign assets of
the central bank, delta_NFA, in the simulation program:
delta_NFA = PXstar*X - PMstar*M - RGstar*FdebtG(-1) - RPstar*FdebtP(-1) +
UTR$ + (AID$ + AID_RES) + FG + FP + ERROR_OMM
In the model, a residual for private consumption, CP, is also calculated. The
historical CP series is calibrated as Qd CG IG IP. In the model, CP is supposed

to be equal to Ydisp*(1-s). Thus, in order to make CP equal to Ydisp*(1-s), we
introduce a residual, which is equal to CP*PQT Ydisp*(1-s). The residual is
calculated using the data points in 2004.
A residual for NGDP is calculated as well. In the model, NGDP =
PQT*Qd+PX*X-PM*M +PMstar*tm*ER*M. In order to equate the right hand side of

the equation to the historical value of NGDP in 2004, we calculate the NGDP residual
which is equal to NGDP in 2004 (PQT*Qd+PX*X-PM*M +PMstar*tm*ER*M).
14
VI. PARTIALLY ADJUSTED VARIABLES

We assumed that some endogenous variables are adjusted gradually. This
means that they follow a partial adjustment process. For example, total output, Y, is
simulated following a partial adjustment process. In this case, the total output
equation can be written as
Y(J, KGinf, Y-1) = Y.[AY[YJ-Y + (1 - Y)(KGinf/Y-1I) -Y]-1/Y] + (1- Y).Y-1,
where Y (lambdaY in the simulation program) is the adjustment parameter. This
parameter captures a low propensity to adjust total output in the short run. Its value is
0.4, which means that the adjustment rate is 40 percent per year.
Similarly, real imports, M, and domestic sales, DOM, are assumed to follow a
partial adjustment process. These equations are redefined as follows
DOM = DOM*(X/(((PX/PD)*((1 - DE)/ DE))DE)) + (1-DOM)*DOM-1,
M = M*(DOM*(((1 - DM)/ DM)*(PD/PM))DM) + (1-M)*M-1,
where M=0.9 and DOM=0.2 are the partial adjustment parameters.
It is assumed that PD exhibits a disequilibrium price mechanism, adjusting
partially towards its equilibrium value, EQPD:
PD = PD.EQPD + (1-PD).PD-1,
(43)
where PD is a parameter measuring the speed of price adjustment towards its

equlibrium value. PD is taken as 0.4.
15
VII. THE SIMULATION PROGRAM

The simulation program is written and run in EViews and it is connected to
outside input and output Excel files. This section describes: (i) how the simulation
package is installed; (ii) how it is coded; and (iii) how it is run.
1. How to Install the Simulation Package
There are 4 files in the package: Niger-data.xls, Niger-Simulation.prg,
Niger-Output.xls, and Niger-Output-Table.xls. The package is installed following
these two steps.
a. Create a directory named Niger on the C drive of your computer.
b. Copy all these files into the newly created directory.
2. The Setup of the Simulation Package
The execution of the simulation program consists of the following steps:
Step 1: The data for the variables are put in the excel file named NigerData.xls. When we run the simulation program, the values of exogenous and
endogenous variables will be imported into the program. The details about the input
file are given in Section II.
Step 2: Running of the simulation program is the second phase of the
simulation process. It is executed in EViews.
Step 3: When the simulation program is completed, the output file, in which
the simulated variables are stored, will be created. It is named as Niger-Output.xls.
It should be noted that this output file is automatically generated by EViews and after
each execution, the program overwrites the existing output file.
16
Step 4: In this stage, the simulated variables stored in Niger-Output.xls will

be used to generate tables summarizing the simulation output. This excel file is
named as Niger-Output-Table.xls. When you open this file, you are asked whether
you want to update the information in the file. If you choose update, the summary
table will be updated by using newly created values of the simulated variables from
Niger-Output.xls.
These steps are presented in Figure 1.
3. Details about the EViews Simulation Program
Before explaining the setup of the simulation program, the following points
must be emphasized related to programming in EViews.6 EViews can work with

square systems. It means that each equation in the model must have only one
endogenous variable assigned to it. Thus the number of independent equations
excluding exogenous variables which are projected within the model must be equal
to the number of endogenous variables in the model. The solution provided by an
EViews program consists of values for endogenous variables given exogenous
variables.
EViews is a quite user friendly program. If your only aim is to investigate the
effects of shocks on the economy or to recalibrate the model with new values of
variables and parameters, it is not necessary for you to be familiar with Eviews
programming. But if you want to make any structural change, you may need to have
more experience with Eviews programming.
Our EViews program is executed by double-clicking on the Niger-
simulation.prg file. It will be automatically launched and the simulation starts

immediately. After the completion of running of the program, EViews generates a
workfile named Niger-Simulation.wk1, in which simulated variables are stored.
A simple example model is presented in Appendix F.
17
3.1. The Basic Information about Running the Program in EViews

This subsection provides basic information on how we can run our simulation
program in EViews.
FIGURE 8
Figure 8 shows how the simulation program looks like when you open the
simulation program file in EViews. In order to run the program, you click on the run
bottom (shown in a black circle in Figure 8). When you click on this bottom, the
following window opens. After you click on OK bottom, the program starts running.
18
If there is no error in the program, the workfile of our program will be opened
automatically right after the program stops. The name of this work file is NigerSimulation.wf1. A sample workfile created by the simulation program is presented in
Figure 9.
FIGURE 9
19
In this file, one can see the list of all variables and parameters. Baseline
variables (exogenous or endogenous) which are simulated within the program are
named with _0 extension. Our model, which is named as Niger also appears in the
list. When you double click on Niger, you can see the details about our model. First
of all, the list of equations appears as default. This is shown in Figure 10. By clicking
on the solve icon (shown in a black circle in Figure 10), you can change your
solution method. Figure 11 shows the solve window. Our model is solved by using
the deterministic simulation technique.7
FIGURE 10
See the EViews Help Manual for details.
20
FIGURE 11
As specified in the EViews Help Manual, the following steps are taken while
running a deterministic simulation model in EViews:

a) The block structure of the model is analyzed.
b) The variables in the model are restricted to series in the workfile.
c) The equations of the model are solved for each observation in the solution
sample. During this process, an iterative algorithm is used to compute
endogenous variables.
d) The results will be rounded to their final values.
As it can be seen in Figure 11, Dynamics option is used to specify how the
values of the lagged endogenous variables are determined. This means that the
lagged endogenous variables in the model are calculated using the solutions
calculated in previous periods, not from actual historical values.
If you change the simulation type or the options related to dynamics, the
model will be simulated again by clicking on OK bottom in Figure 11. The old values
of the simulated variables will be replaced by the new values of them and these new
values will be stored in the workfile. If you want to store new values, you should save
the workfile by clicking on save bottom as shown in a black circle in Figure 9.
21
You may want to run our program using different parameter values. In this
case, you need to specify these new values in the simulation program file. If you
make any changes in the program, you should save it before you run it again. In
order to save a file, you need to click on the save icon (shown in a red circle in
Figure 8).
3.2 EViews Commands Used in the Program
We use different EViews commands in the simulation program. These
commands and their meanings are given below. Detailed information is presented in
Appendix D. It should be noted that since Eviews reads codes only in the text format,
the program can be written either in the Eviews environment directly or in Microsoft
Word but then saved as a text file with a prg extension, which stands for EViews
program.
a. The Create Command
Whenever one runs an EViews program, a workfile will be created, which
contains data we used and all results created by the program. Detailed information
on workfiles is given in Appendix D. In order to create this workfile, one uses the
create command. The general syntax for this command is as follows:
create workfile_name frequency start end
Any workfile name can be chosen. The frequency of data can be annual,
monthly, etc or undated. While start specifies the starting date of the data, end is
the last year in our data file. In the program, this command is coded as follows
create Niger-simulation U 17
Here Niger-simulation is chosen as name of our workfile, which will be
created by our simulation program after we run it. U stands for undated data
22
frequency. Since our data file and the simulation program covers the years starting in
1999 up to 2015, the number of observations is 17.
b. The smpl Command
The smpl, which stands for sample, command specifies the time period that
we are working on. It is generally used after the create command. The general
syntax of this command:
smpl sample_name start end
It is optional to name your sample. The sample range must be given using the
starting and ending dates. One example of smpl command in our code is
smpl 1 17
Note that we have not given any sample name. This code specifies that we will
work with the sample covering the periods from 1 to 17. This means that all the
following calculations and simulations will be done for this period as far as we do not
change our sample range. Some of our calculations require a smaller sample range.
In this case, we redefine our sample range such as smpl 3 17.
c. The Read Command
As it is specified before, we need to use an external data file. When this is the
case, we use the read command to import data from an external file. The general
syntax is:
read(options) path\file_name variable names
After the read command, we have to specify our options. Our external data
file is an Excel file. Thus the options are defined in a way that the program is
23
importing data from an Excel file. We explain these options below. Then we have to
specify the location of our data file and its name. At the end, we write the names of
the variables that we want to import. The order of the names of the variables must
match with their order in the Excel file.
The read command, which imports exogenous variables in the program, is
specified as follows:
read(ae4, t, s=EXO) C:\Niger\Niger-Data.xls AID$ CG DB ER ERROR_OMM FP kappa kappa_edu
kappa_hea kappa_inf kappa_oth LAND LE_G n PMstar PXstar RD RGstar RPstar tm UTR$ WG tmnew
We want to import data from an excel file; thus we need to specify our options
accordingly. Options will be presented within the parenthesis.

a) Provide information about the coordinates of the upper left cell of the data
matrix (excluding names and other definitions) in the Excel spreadsheet. In our
example, c4 stands for the cell number, at which point data that we want to import
starts.
b) Write t when our data series are in rows rather than in columns. In this
columns. In this way, the observations will be read in rows. s=sheet_name option
shows the sheet in the Excel workbook from which data is to be read. Thus, s=EXO
means that we want to import data from the sheet named EXO. The location of the
data file is C:\Niger\ and the name of the file is Niger-Data.xls.
c) List the name of variables that will be imported. These will be the names
that will be used if we need to refer to them in our program. It should be noted that
the order of the variables must follow that of the listing of the variables in the Excel
file. Figure 3 shows how the EXO sheet of our data file looks like. The projected data
are highlighted in blue.
We follow exactly the same procedure to import endogenous variables using
this command:
read(ae4, t, s=ENDO) C:\Niger\Niger-Data.xls AID CP DdebtG delta_LE_N Delta_NFA DITAX DITXR DOM
FdebtG FdebtP FdebtTot FG GBAL GTOT IG IGedu IGhea IGinf IGoth INDTAX INDTXR IP J KGedu KGhea
KGinf KGoth KP LE LE_P LR M NGDP PD PM POP PQ PQT PX PY Q Qd SP T TAX X Y Ydisp YTOT Z KGZ
24
Now, we refer to the sheet name ENDO and we have a new list of variables.
Figure 4 shows how the ENDO sheet of our data file looks like. Since these variables
will be determined within the model after 2004, we do not project them.
d. The Write Command
The write command exports variables from EViews into an external file. The
way it is coded is quite similar to the read command. The general syntax:
write(options) path\file_name variable names
This command appears in our code as follows

smpl 3 17
'baseline'
write(t=xls,b4,t) C:\Niger\output-niger.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0
FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0
LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0 X_0 Ydisp_0 Y_0 kappa_edu kappa_hea
kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm UTR$ Delta_NFA_0 ERROR_OMM_0
NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0 kappa_oth WG_0 IGoth_0 DITAX_0
INDTAX_0 PQT_0 Z_0 KGZ_0
Here we want to export variables for the period 3 to 17 corresponding to the
years from 2001 to 2015. The first of the options specified in the code is t=xls, which
means that the type of file, in which we want to write the outcome, is an Excel file.
Then we write the coordinate of the cell, at which the exported series will start in the
output file. If we want to export our series in rows, we have to include t while
defining our options. Then we specify the desired location of the file that will be
created and the name of the file. If this file does not exist, the program is going to
create it automatically. On the other hand, if it already exists, the program is going to
overwrite it. At the end, we list the names of the series that we want to export. Figure
4 shows an output file.
e. The Model Command
25
The model command creates a model. We have to declare our model before
we start coding our equations. The general syntax:

model model_name
In our simulation program, the name of our model is Niger and it is declared
as follows
model Niger
f. The Append Command
We use the append command to specify our equations. The general syntax
is:
model_ name.append equation
For instance, population is defined by the following equation in the program:

niger.append POP = (1+n)*POP(-1)
It specifies that the equation POP = (1+n)*POP(-1) is going to be added to the
model Niger.
g. The Solve Command
The solve command triggers Eviews to solve a model. While running this
command, the Eviews will find a solution to a simultaneous equation model using
available data. This command needs to be placed after equations are listed. The
general syntax is:
solve(options) model_name
26
There are many options that we can use within the solve command. Details
are given in Appendix D. In our simulation program, we use the default solution,
which is dynamic simulation.
The name of the model that will be solved must be specified. The solution
method may be modified by changing the options. The code in the program is:
smpl 7 17
solve(m=100000, c=.001) niger
We set our sample range between 7 and 17. This means that the model will be
solved for the years 2005 to 2015. m = integer indicates the maximum number of
iterations to be executed. c = number specifies the convergence criterion for the
solution of the dynamic simulation. Niger is the name of our model.
h. The Statusline Command
This command enables a message to be displayed on the status line at the
bottom of the Eviews window. The general syntax is:

statusline message
We use this command as follows

Statusline iteration number: !IDX
This means that the current iteration number for the current period will be
written as Eviews runs the simulation program.

i. The genr Command
This command generates new series, which are calculated using available
series. The general syntax is:

27
genr ser_name = expression
For instance, the following statement generates the T series using different
series and parameters:

genr T = AT*(beta_T*(LE_P^(-rho_T)) + (1 - beta_T)*((Kghea/(POP^theta_H))^(-rho_T)))^(-(1/rho_T))
4. Details about the Excel Output File
All simulated endogenous variables and exogenous variables projected within
the program are named with _0 extension. For example, AID_0 is the simulated AID
series. All exogenous variables and historical endogenous variables preserve their
original names; they do not take any extension. The output file is created for the
period from 3 to 17. This corresponds to the years from 2001 to 2015. The historical
values of the variables will be reported between 2001 and 2004. After these years,
the simulated values of endogenous variables and the projected values of the
exogenous variables will be presented.
5. Details about the Summary Table File
This table is directly linked to the Niger-Output.xls file. It has to be updated if
we have a new output file. In order to update this table, the file must be opened and
then the update option must be chosen when the Excel program asks whether you
want to update this file or not. In this table, variables are presented either in levels (in
millions of LCU) or in percent of other variables, especially in percent of NGDP.
VIII. Simulating Shocks
28
This section explains how we can implement shock in the simulation program.
In Pinto Moreira and Bayraktar (2005), there are three different types of shocks
introduced:
1. Shock 1: Permanent increase in the ratio of foreign aid to GDP by 5
percent.
2. Shock 2: 12 percentage point reduction in investment in other
category, which is fully reallocated to investment in infrastructure.
3. Shock 3: Permanent cut of 10 percentage point in the effective tariff
rate.
a. Case 1 - The Non-Neutral Case: No change in the indirect and
direct tax rates.
b. Case 2 - The Neutral Case (Adjustment in Direct Taxation): the
effect of the tariff cut on revenue is offset, ex ante (that is, at
initial baseline values), by an increase in direct taxation.
c. Case 3 - The Neutral Case (Adjustment in Indirect Taxation): the
effect of the tariff cut on revenue is offset, ex ante (that is, at
initial baseline values), by an increase in indirect domestic
taxation.
In order to run these shocks we have to make some simple changes in the
simulation program. All we need to do is to open some of the lines in the program,
which need to be closed during the baseline simulation, and to close some of the
lines if they will not be used while running the program to investigate the effects of
the shocks. In order to open a line in EViews, all we need to do is to remove the '
sign at the beginning of the line. We do the opposite to close a line: add ' at the
beginning of the line. In this way, the program is not going to read these lines when it
is executed.
SHOCK 1 - Increase in Foreign Aid
29
Our first shock on the economy is a permanent increase in the aid-to-GDP
ratio by 5 percentage points (i.e. 0.05). The original value of the ratio of aid to GDP
was 10.67 %. Its value will increase to 10.67% + 5% = 15.67% after the shock to aid
is introduced. In order to apply this shock:
a) Open the line named as line1shock1 in the simulation program under the
SHOCKS section. When we open this line, EViews reads this line. The following
example shows how we can open this line.
A CLOSED Line
'line1shock1'scalar AID_const = 0.1067 + 0.05
How to OPEN the line

'line1shock1'
scalar AID_const = 0.1067 + 0.05
How to re-close the line

In order to prevent the program from overwriting on the existing output file, we
assign a new name to the output file that will be generated after we run the program.
In order to do this, we need to open the following line:
'line2shock1'write(t=xls,b4,t) C:\Niger\output-niger-shock1.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0
ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0
KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0 X_0
Ydisp_0 Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar
tm UTR$ Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGoth_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0
YTOT_0 kappa_oth WG_0 IGoth_0 DITAX_0 INDTAX_0 PQT_0 Z_0 KGZ_0
The solution to our model will be stored in the output-niger-shock1.xls output file.
Since we will create a new output file, we have to close the line containing the
original write command. In EViews, lines are closed adding at the beginning of
the line. After you close this line, it looks like as follows:
write(t=xls,b4,t) C:\Niger\output-niger.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER FdebtG_0
FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0 KGhea_0
KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0 X_0 Ydisp_0
30
Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm UTR$
Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGoth_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0
kappa_oth WG_0 IGoth_0 DITAX_0 INDTAX_0 PQT_0 Z_0 KGZ_0
After these changes are made, the simulation program must be saved before
we run it. A new output file will be created which will store the new values of
simulated variables after the shock. The results are shown in Table 4 in Appendix G.
In this file, the results are displayed as percentage changes (for variables in levels) or
absolute differences (for variables already in percentage form) from the baseline
scenario.
Note: The lines that we had opened or closed to run the shocks have to be re-closed
or re-opened again after the output file is created.
Percentage change = 100*(new value original value)/original value.

Example: From the baseline table (See Table 3 in Appendix G), gross
domestic product at market prices is simulated as 5246.2 billion CFA Franc in
2015 and it is equal to 8116.3 billion CFA Franc in 2015 when there is a 5%
increase in aid to GDP ratio, the first shock.
Percentage change = 100*(8116.3 -5246.2)/ 5246.2 = 54.71%
Absolute Deviation from the baseline = absolute value of (New value

Original value).
Example: From the baseline table, the current account balance is simulated as
2.4% (in percent of GDP) in 2015 and it is equal to 5.8% (in percent of GDP) in
2015 when there is a 5% increase in aid to GDP ratio, the first shock.
Absolute deviation from the baseline = absolute value of (5.8%-2.4%) = 3.39%
31
SHOCK 2 - Reallocation of Public Investment
The second shock is a 20 percentage point reduction in investment in other
categories, which is fully reallocated to investment in infrastructure. In order to run

this shock, all we need to do is to open some of the lines in the simulation program.
The lines that need to be opened in the program are:
'line1shock2'smpl 6 17
'line2shock2'genr kappa_oth = kappa_oth - 0.20
'line3shock2'genr kappa_inf = kappa_inf + 0.20
'line4shock2'write(t=xls,b4,t) C:\Niger\output-niger-shock2.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0
ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0
The new values of the capital shares will be used only during the period that we
simulate the model. It corresponds to the sample period from 7 to 17 (the years
between 2004 and 2015). genr kappa_oth = kappa_oth - 0.20 generates the new
public investment share in other capital, which is 20% less than the original level.
This drop in the share of public investment in other will be allocated to public
investment in infrastructure. Thus its value will be 20% higher. The new share
parameter is defined as genr kappa_inf = kappa_inf + 0.20.
The location of the last line is at the end of the program. The output file that
will be created after we run the program will be output-niger-shock2.xls. The results
of this shock are presented in Table 5 in Appendix G. Since the output will be
exported to a new output file, we must close the line containing the original write
command. This can be achieved by adding
at the beginning of the line which
writes the output in output-niger.xls file.

When opening these lines, the code will look like as follows:
'line1shock2'
smpl 6 17
32
'line2shock2'
genr kappa_oth = kappa_oth - 0.20
'line3shock2'
genr kappa_inf = kappa_inf + 0.20
'line4shock2'
write(t=xls,b4,t) C:\Niger\output-niger-shock2.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER
FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0
After the program is run, we need to close the lines that we had opened, and
open the lines that we had closed.

SHOCK 3 - Reduction in Tariffs
In this section, the aim is to study the impact of a permanent cut of 12
percentage point in Nigers effective tariff rate. We first examine the case where the
cut is non-neutral. We then study the case where the authorities offset the adverse
revenue effect of lower tariffs by either an increase in direct or indirect taxes.
The Non-Neutral Case Shock 3a
The purpose is to investigate the response of the economy to a drop in tariff
rate. In the non-neutral case, we keep the direct and indirect tax rates at their year
2004 values throughout the simulation process. We need to slightly change the
simulation program to run this shock. First of all, the following lines in the program
must be opened:
'---------------------------------------------------------------------------------------------------------'Shock to tm (DITXR and INDTXR fixed)
'---------------------------------------------------------------------------------------------------------'line1shock3a'smpl 7 17
'line2shock3a'genr tm = tmnew
'line3shock3a'scalar DITXR_ALT = 0.019826305 'for tm shock
'line4shock3a'scalar INDTXR_ALT = 0.023180876 'for tm shock

'---------------------------------------------------------------------------------------------------------'NOTE: Before running this shock, don't forget to close the DITXR and INDTXR equations above.
33
'line5shock3a'niger.append DITXR = DITXR_ALT

'line6shock3a'niger.append INDTXR = INDTXR_ALT
'line7shock3a'write(t=xls,b4,t) C:\Niger\output-niger-shock3a.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0
DOM_0 ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0
KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0
TAX_0 X_0 Ydisp_0 Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD
RGstar RPstar tm UTR$ Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGoth_0 LE_P_0 LE_G_0 DITXR_0
INDTXR_0 YTOT_0 kappa_oth WG_0 IGoth_0 DITAX_0 INDTAX_0 PQT_0 Z_0 KGZ_0
Since the shock is applied only during the simulation period, we set the sample
range between 7 and 17. genr tm = tmnew defines our new tariff rate, which is equal to
the half of the old tariff rate. scalar
0.023180876
DITXR_ALT = 0.019826305
and scalar
INDTXR_ALT =
guarantee that the direct and indirect tax rates will be kept at their original
levels in 2004.
We add two new equations to our model: niger.append
niger.append INDTXR = INDTXR_ALT.
DITXR = DITXR_ALT
and
These equations specify that the direct and
indirect tax rates will be kept constant at their original levels throughout the
simulation process.
The last line in the set writes the results into the output-Niger-shock3a.xls file.
It should be noted that the locations of the lines in this set are different. The first set
of lines is located in the shocks section of the program. The ones in the middle are
located in the section we define the equations. The last line is at the end of the
program. After we open these lines, they will look like as follows
'---------------------------------------------------------------------------------------------------------'line1shock3a'
smpl 7 17
'line2shock3a'
genr tm = tmnew
'line3shock3a'
scalar DITXR_ALT = 0.019826305 'for tm shock
'line4shock3a'
scalar INDTXR_ALT = 0.023180876 'for tm shock

'---------------------------------------------------------------------------------------------------------'NOTE: Before running this shock, don't forget to close the DITXR and INDTXR equations above.
34
'line5shock3a'
niger.append DITXR = DITXR_ALT
'line6shock3a'
niger.append INDTXR = INDTXR_ALT
'line7shock3a'
write(t=xls,b4,t) C:\Niger\output-niger-shock3a.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER
FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0
In addition to these changes, the line containing the original write command
must be closed, as we did before, since we will create a new output file to study the
effects of the shock. This can be achieved by adding at the beginning of the line.
The results are presented in Table 6 in Appendix G. After we obtain this output
file, we need to close the lines that we had opened and open the lines that we had
closed.
The Neutral Case: Adjustment in Direct Taxation Shock 3b
In this scenario, we consider the case where the effect of the tariff cut on
revenue is offset by an increase in direct taxation. Given the magnitude of the

reduction in the effective tariff rate, this requires an increase in the direct tax rate of
4.89 percentage points.
The aim is to keep the total tax revenue and total indirect tax revenue fixed
and to adjust the indirect tax rate in a way to compensate any tax loss caused by the
lower tariff rate. The new direct tax rate is calculated using the following equation:
New direct tax rate = (TAX INDTAX (tm/2).ER.M.PM*)/YTOT
The values of the variables are giving in the following table.
35
TAX
INDTAX
tm
ER
PMstar
M
YTOT
Alternative direct tax rate
2004
1.717E+11
42670999624
0.239834512
528.2848
0.000713135
1.06446E+12
1.65688E+12
0.049
The preparation of the program to run this shock is quite similar to the
changes that we made to run the previous shocks.
In the Shocks to tm and DITXR section (given below), the last two lines must
be opened. The first line helps us reduce the value of the tariff rate to half of its
original value. The last line increases the direct tax rate to 4.89% in order to
compensate the reduction in tax revenue caused by decreased tariff rates.
'---------------------------------------------------------------------------------------------------------'Shock to tm and DITXR (INDTXR fixed)
'---------------------------------------------------------------------------------------------------------'NOTE: When tm drops to tmnew, the new value of DITXR must be equal
'to 0.048850383, keeping total tax revenue and INDTXR fixed.
'It is calculated for 2004.
'line1shock3b'genr tm = tmnew
'line2shock3b'scalar DITXR_ALT = 0.048850383
We also need to open the last line of the following section. This line equates
the value of DITXR to its new higher value.

'---------------------------------------------------------------------------------------------------------'Shock to tm and DITXR (INDTXR fixed)
'---------------------------------------------------------------------------------------------------------'NOTE: Before running this shock, don't forget to close the DITXR equation above.
'line3shock3b'niger.append DITXR = DITXR_ALT
Since DITXR is defined using the new equation specified above, we need to
close the line containing the original equation determining DITXR. The line that we
need to close is:
36
niger.append DITXR = DITXR_const
Its location is the section, in which we list the equations. In addition to these
changes, we must also open the line that generates our new output file, which is
named as output-Niger-shock3b.xls.
'line4shock3b'write(t=xls,b4,t) C:\Niger\output-niger-shock3b.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0
As we did before, we have to close the line containing our original write command in
order to prevent the program from overwriting the baseline output file.
The results are presented in Table 7 in Appendix G.
After we obtain our results, all the changes that we have done must be adjusted
to their original setup.
The Neutral Case: Adjustment in Indirect Taxation Shock 3c
In this final shock scenario, we consider the case where the effect of the tariff
cut on revenue is offset by an increase in indirect domestic taxation. Given the

magnitude of the reduction in the effective tariff rate, this requires a 4.93 percentage
point increase in the indirect tax rate on domestic sales of goods and services.
The aim is to keep the total tax revenue and total direct tax revenue fixed and
to adjust the direct tax rate in a way to compensate any tax loss caused by the lower
tariff rate. The new indirect tax rate is calculated using the following equation:
New indirect tax rate = (TAX DITAX (tm/2).ER.M.PM*)/(PQ.Q)
37
The values of the variables are giving in the following table.
TAX
DITAX
tm
ER
PMstar
M
YTOT
Alternative indirect tax rate
2004
1.717E+11
32849901454
0.239834512
528.2848
0.000713135
1.06446E+12
1.65688E+12
0.049
The preparation of the program to run this shock is quite similar to the
changes that we made in the model to run the previous shocks.
In the Shocks to tm and INDTXR section (given below), the last two lines
must be opened. These two lines help us reduce the value of the tariff rate to the half
of its original value. The last line increases the indirect tax rate to 4.93% in order to
compensate the reduction in tax revenue caused by decreased tariff rates.
'---------------------------------------------------------------------------------------------------------'Shock to tm and INDTXR (DITXR fixed)
'---------------------------------------------------------------------------------------------------------'NOTE: When tm drops to tmnew, the new value of INDTXR must be equal
'to 0.049305362, keeping total tax revenue and DITXR fixed.
'It is calculated for 2004.
'line1shock3c'genr tm = tmnew
'line2shock3c'scalar INDTXR_ALT = 0.049305362
We also need to open the last line of the following section. This line equates
INDTXR to its original value.

'---------------------------------------------------------------------------------------------------------'Shock to tm and INDTXR (DITXR fixed)
'---------------------------------------------------------------------------------------------------------'NOTE: Before running this shock, don't forget to close the INDTXR equation above.
'line3shock3c'niger.append INDTXR = INDTXR_ALT
38
Since INDTXR is redefined using this new equation, we have to close the line
containing the original equation determining INDTXR. The line that we need to
close is:
niger.append INDTXR = 0.00792+0.706572*INDTXR(-1)-0.029834*(AID/NGDP)+ INDTXR_RES
The location of this line is the section in which we list the equations.
In addition to these changes, we must also open the line that creates our new
output file (output-Niger-shock3c.xls).
'line4shock3c''write(t=xls,b4,t) C:\Niger\output-niger-shock3c.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0
One should not forget to close the line containing the original write command.

As it is noted before, after the new output file is created, all the changes that
we have done must be turned back to their original setup.
IX. SENSITIVITY ANALYSIS

In this case, we assume that public investment is partially efficient such that h
is equal to 0.5. In order to obtain the baseline results, open the following lines in the
program:
'line1baseline 2'scalar alpha_h = 0.5
'line2baseline2'write(t=xls,b4,t) C:\Niger\OUTPUT-NIGER4.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER
FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0 KGhea_0
KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0 X_0 Ydisp_0 Y_0
39
kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm UTR$
Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0 kappa_oth
WG_0 IGoth_0 DITAX_0 INDTAX_0 PQT_0 Z_0 KGZ_0

Similarly, in order to run a aid shock (5 percent increase in aid to GDP)
together with partially efficient IG, one needs to open the following lines in the
program:
'line1shock4'scalar alpha_h = 0.5
'line3shock4'write(t=xls,b4,t) C:\Niger\output-niger-shock4.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER
FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0 KGhea_0
KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0 X_0 Ydisp_0 Y_0
kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm UTR$
Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0 kappa_oth
WG_0 IGoth_0 DITAX_0 INDTAX_0 PQT_0 Z_0 KGZ_0

As it is noted before, after the new output file is created, all the changes that
we have done must be turned back to their original setup.
X. LINKING THE MODEL WITH THE MILLENNIUM DEVELOPMENT GOALS

(MDGS)
This section explains how we can link the macroeconomic framework to the
MDGs.8 It is also shown how we can run the simulation program to create simulated
data files which are used to construct the MDG tables.
Details are given in Agenor, Bayraktar, Pinto Moreira, and El Aynaoui (2005).
40
Six of the MDG indicators are integrated: the poverty rate, the literacy rate,
infant mortality, malnutrition, life expectancy, and access to safe water. Because the
model can directly calculate values for the poverty and the literacy rates, we only ran
regressions to estimate the equations for infant mortality, malnutrition, life
expectancy, and access to safe water. The estimation method is ordinary least
squares. We use cross-section data, obtained by taking average values of variables
for each country for the period 1965-2003, depending on the availability of data
series. Our sample consists of Sub-Saharan countries. The regression results are
presented in the following table.
41
Cross-Section Regression Results

(All sub-Saharan countries are included unless otherwise indicated)
Dependent variables
ln(MORTALITY)
ln(LIFE_EXP)
5.485
3.428
(10.761)
(27.187)
-0.091
0.048
(-1.949)
(2.802)
ln(GDPPC2003$)
MALNUTRITION
75.415
(6.055)
-4.790
(-3.961)
-7.951
(-4.126)
0.144
(1.635)
INF_GDP
0.011
(3.247)
-0.191
(-2.820)
ln(POP_DENSITY)
Number of
observations
2
Adjusted R
28
31
20
31
0.552
0.479
0.739
0.292
Constant term
HEA_P_GDP 1/
ln(CPPC2003$)
POVERTY
-0.002
(-2.771)
0.078
(4.189)
WATER 2/
6.711
(0.299)
6.921
(2.458)
1.702
(1.718)
4.076
(1.551)
Note: The estimation technique is OLS. Data points of independent variables in each country
correspond exactly to the years in which dependent variables are available. First, averages at the
country level are calculated, then the regression equations are run using these cross sectional data. tstatistics are reported in parenthesis. MALNUTRITION is malnutrition prevalence, weight for age (%
of children under 5); HEA_P_GDP is public health expenditure in % of GDP; CPPC2003$ is private
consumption per capita (in constant 2003 dollars); POVERTY is the percent of population living under
$2 per day; MORTALITY is infant mortality rate (per 1000 live births); GDPPC2003$ is GDP per
capita (in constant 2003 dollars); LIFE_EXP is life expectancy at birth, total, years; INF_GDP is public
infrastructure expenditure in percent of GDP; WATER is percentage of population with access to safe
water; POPDEN is population density (people per km square).
1/ While the data source of public heath expenditure is Government Financial Statistics in the lifeexpectancy regression, the data source of public heath expenditure is World Bank African Database
in other regressions.
2/ Due to insufficient number of data points for sub-Saharan African countries, all developing
countries are included depending on data availability.
After estimating these coefficients, we calculate the residuals of each

regression equation for Niger, which are going to be used in calculating predicted
values of the MDG indicators. For example, in case of malnutrition prevalence, the
estimated equation is:
ACTUAL value of MALNUTRITION = - 4.79*(HEA_P_GDP) 7.951*LN(CPPC2003$) + 0.144* POVERTY + MALNUTRITION RESIDUAL
42
where MALNUTRITION is malnutrition prevalence, weight for age (% of children

under 5); HEA_P_GDP is public health expenditure in % of GDP; CPPC2003$ is
private consumption per capita (in constant 2003 dollars); POVERTY is the percent
of population living under $2 per day. MALNUTRITION was 40.1 percent in Niger in
2000 (the latest available data point); HEA_P_GDP was 1.28; CPPC2003$ was
$175; and POVERTY was 63 percent. Plugging these numbers in the equation given
above, we can calculate the residual as
MALNUTRITION RESIDUAL =40.1+4.79*(1.2801)+7.951*LN(175.0706)-0.144*63
Then, we can calculate the predicted values of MALNUTRITION by using the
simulated data as follows:
PREDICTED VALUE OF MALNUTRITION = -4.79*(100*IGhea*PQT/NGDP) 7.951*LN([CP/(ER in 2003)]/POP) + 0.144*POVERTY + MALNUTRITION RESIDUAL
where POVERTY is defined with the partial elasticity of -1.0.
Similarly, we calculate the residual of infant mortality for Niger by using the
following equation:
LN(ACTUAL value of INFANT MORTALITY) = - 0.091*(HEA_P_GDP) 0.191*LN(GDPPC2003$) - 0.011* POVERTY + INFANT MORTALITY RESIDUAL
where MORTALITY is infant mortality rate (per 1000 live births) and GDPPC2003$ is
GDP per capita (in constant 2003 dollars). INFANT MORTALITY was 155 in Niger in
2002 (the latest available data point); HEA_P_GDP was 0.84; GDPPC2003$ was
$220; and POVERTY was 63 percent. Plugging these numbers in the equation given
above, we can calculate the residual as
43
INFANT MORTALITY RESIDUAL=LN(155) +0.091*0.84+0.191*LN(220)-0.011*63

Then, we can calculate the predicted values of INFANT MORTALITY by using the
simulated data series. For example in 2005
PREDICTED VALUE OF INFANT MORTALITY = EXP(0.091*(100*IGhea*PQT/NGDP) -0.191*LN([(NGDP/PQT)/(ER in 2003)]/POP) +
0.011*POVERTY + INFANT MORTALITY RESIDUAL)
Similarly, the residual of life expectancy for Niger is:
LN(ACTUAL value of LIFE EXPECTANCY) = 0.048*(HEA_P_GDP) +
0.078*LN(GDPPC2003$) 0.002*POVERTY + LIFE EXPECTANCY RESIDUAL
where LIFE_EXP is life expectancy at birth (total, years). LIFE EXPECTANCY was
46.19 in Niger in 2002 (the latest available data point); HEA_P_GDP was 0.84;
GDPPC2003$ was $220; and POVERTY was 63 percent. Plugging these numbers in
the equation given above, we can calculate the residual as
44
LIFE EXPECTANCY RESIDUAL= LN(46.19)-0.048*(0.84227)0.078*LN(219.6256)+0.002*63

Then, we can calculate the predicted values of LIFE EXPECTANCY by using the
simulated data as follows:
PREDICTED VALUE OF LIFE EXPECTANCY =
EXP(0.84227*(100*IGhea*PQT/NGDP)
+0.078*LN([(NGDP/PQT)/(ER in 2003)]/POP)
+ 0.002*POVERTY + LIFE EXPECTANCY RESIDUAL)
Access to safe water is calculated as follows. The residual of access to safe
water for Niger is:
(ACTUAL value of WATER) = 4.0767*LN(POPDEN) +
6.9219*LN(GDPPC2003$) + 1.7024*(INF_GDP) + WATER RESIDUAL
where INF_GDP is public infrastructure expenditure in percent of GDP, WATER is
percentage of population with access to safe water, and POPDEN is population
density (people per km square). WATER was 59 in Niger in 2000 (the latest available
data point); INF_GDP was 1.712; GDPPC2003$ was $212; and POPDEN was 8.48
per km square. Plugging these numbers in the equation given above, we can
calculate the residual as
45
WATER RESIDUAL= =59-4.0767*LN(8.48)-6.9219*LN(212)-1.7024*1.712

Then, we can calculate the predicted values of WATER by using the simulated
data as follows:
PREDICTED VALUE OF WATER =
1.7024*(100*IGinf*PQT/NGDP)
+6.9219*LN([(NGDP/PQT)/(ER in 2003)]/POP)
+ 4.0767*POPDEN + WATER RESIDUAL.
Calculation of the Composite MDG Indicator

This indicator summarizes the changes in the MDG indicators. It is calculated
by combining poverty (neutral case), literacy rate, life expectancy, access to safe
water, malnutrition prevalence, and infant mortality. The index is assumed to be
equal to 100 in 2005. An increase indicates an improvement. First of all, we calculate
the value of each MDG indicator with respect to their values in 2005.9 For example,
Relative poverty rate in 2006 = Poverty rate in 2006/Poverty rate in 2005.
It should be noted that while calculating the index, we take the inverse of
poverty, malnutrition prevalence, and infant mortality since an increase in indicators
are supposed to show an improvement toward achieving the MDGs.
After calculating the relative values of the MDG indicators, their geometric
average is the composite MDG indicator.
Creating Simulated Data Files
Niger-MDG-table-baseline.xls shows how this index is calculated.
46
The baseline MDG table is given in Niger-MDG-table-baseline.xls file. This

file is linked to OUTPUT-NIGER.xls and Niger-Output Table-BASELINE-MDG.xls
files.10 The baseline MDG table is given in Appendix I.
SHOCK 5 Effects of an Increase in Foreign Aid on the MDG Indicators
The first shock is a permanent increase in the aid-to-GDP ratio by 5
percentage points (i.e. 0.05) starting in 2006. The original value of the ratio of aid to
GDP is taken to be equal to 10.67 % up to 2006. Its value will increase to 10.67% +
5% = 15.67% in 2006. The variable introducing this shock in the simulation program
is AID_GDP_MDGSHOCK.
In order to apply this shock, open the following lines in the simulation program.
'line 1 MDG AID SHOCK after 2005'niger.append AID = NGDP*AID_GDP_MDGSHOCK

'line 2 MDG AID SHOCK after 2005'write(t=xls,b4,t) C:\Niger\output-niger-shock5.xls AID_0 CG_0 CP_0 PQ_0
DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0
J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0
TAX_0 X_0 Ydisp_0 Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar
RPstar tm UTR$ Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0
In order to run this aid shock, the following line in the simulation program
should be closed as indicated in the program:
niger.append AID = AID_const * NGDP
simulated data after the shock.
10
Details about how OUTPUT-NIGER.xls is constructed are given in Section VII.
47
The output file, OUTPUT-NIGER-SHOCK5.xls, is used to create the
summary table, Niger-Output Table-SHOCK5.xls, and the MDG table, Niger-MDGtable-withaidshock.xls. Niger-output-Aid-Shock-MDG Table 1.xls shows the
deviation from the summary baseline table.
Niger-MDG-table-withaidshock-deviation.xls presents the deviation from the
baseline MDG table. This table is given in Appendix I.
SHOCK 6 Effects of Cancellation of External Debt on the MDG Indicators
The second shock is cancellation of external debt. For this experiment, we
assume that the outstanding stock of Nigers external debt is cancelled in 2006, and
that in the following years new borrowing occurs only at a very low effective interest
rate, of 0.2 percent. We assume that the savings associated with lower interest
payments (which represent about 0.52 percent of GDP in 2006) are reallocated
entirely to public investment.
This additional revenue is calculated as follows using the simulated data given
in OUTPUT-NIGER.xls file.
100*FdebtG in 2005*RG* in 2006*ER in 2006/NGDP in 2006 = 0.52 percent
In order to run this shock, new variables are introduced in the simulation
program. IGRESIDUALFORDEBT is additional income from debt relief, which is

entirely allocated to public investment. DUMMY1 is a dummy variable which is equal
to 0 in 2006 (in which public external debt is cancelled) and 1 otherwise. It
guarantees that external public interest payment is going to be zero in 2006.
RGSTARlow series is equal to its original values up to 2006, but it is equal to 0.2
48
percent after that, corresponding to a lower effective interest rate on public external
debt.
'line 1 - debt relief shock'niger.append GTOT = WG*LE_G + PQT*(CG + IG) + DUMMY1*RGstarlow*ER*FdebtG(1) + RD*DdebtG(-1)
'line 2 - debt relief shock'niger.append IG = (-0.174921+0.649353*(TAX(-1)/(NGDP(-1)))+1.549799*(AID/NGDP)3.26115*(AID/NGDP)^2)*NGDP/PQT + IGRESIDUALFORDEBT
'line 3 - debt relief shock'niger.append delta_NFA = PXstar*X - PMstar*M - DUMMY1*RGstarlow*FdebtG(-1) RPstar*FdebtP(-1) + UTR$ + (AID$ +AID_RES) + FG + FP+ERROR_OMM
'line 4 - debt relief shock'niger.append FdebtG = FG + DUMMY1*FdebtG(-1)
'line 5 - debt relief shock'write(t=xls,b4,t) C:\Niger\output-niger-shock6.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0
KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0
X_0 Ydisp_0 Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm
UTR$ Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0
In order to run this shock the following lines in the simulation program should
be closed as indicated in the program:
'NOTE: Close the following line when running the debt relief shock (Shock 6)
niger.append GTOT = WG*LE_G + PQT*(CG + IG) + RGstar*ER*FdebtG(-1) + RD*DdebtG(-1)
niger.append IG = (-0.174921+0.649353*(TAX(-1)/(NGDP(-1)))+1.549799*(AID/NGDP)3.26115*(AID/NGDP)^2)*NGDP/PQT + IG_RES
niger.append delta_NFA = PXstar*X - PMstar*M - RGstar*FdebtG(-1) - RPstar*FdebtP(-1) + UTR$ + (AID$
+AID_RES) + FG + FP+ERROR_OMM
niger.append FdebtG = FG + FdebtG(-1)
'baseline'
write(t=xls,b4,t) C:\Niger\output-niger.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0
FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0 J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0
LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0 X_0 Ydisp_0 Y_0 kappa_edu kappa_hea
kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm UTR$ Delta_NFA_0 ERROR_OMM_0
49
NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0 kappa_oth WG_0 IGoth_0 DITAX_0
INDTAX_0 PQT_0 Z_0 KGZ_0
summary table, OUTPUT-NIGER-SHOCK6.xls, and the MDG table, Niger-MDGtable-withdebtshock.xls. Niger-output-Debtrelief-Shock-Table 2.xls presents the
deviation from the baseline summary table.
Niger-MDG-table-withdebtshock-deviation.xls presents the deviation from the
baseline MDG table. This table is given in Appendix I.
SHOCK 7 Effects of 0.52 percent Increase in Foreign Aid on the MDG

Indicators
This policy experiment aims to investigate the question of whether the impact
of debt relief compares favorably with a permanent increase in aid of the exact same
magnitude, of about 0.52 percentage of GDP, beginning also in 2006.
Given that the original value of the ratio of aid to GDP is equal to 10.67 %, it
will increase to 10.67% + 0.52% = 11.19% in 2006. The variable introducing this
shock in the simulation program is AID_GDP_MDGSHOCK2.
50
'line 1 MDG AID SHOCK of 0.52 % after 2006'niger.append AID = NGDP*AID_GDP_MDGSHOCK2

'line 2 MDG AID SHOCK of 0.52 % after 2006' write(t=xls,b4,t) C:\Niger\output-niger-shock7.xls AID_0 CG_0
CP_0 PQ_0 DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0
IGinf_0 IP_0 J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q
SP_0 T_0 TAX_0 X_0 Ydisp_0 Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD
RGstar RPstar tm UTR$ Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0
In order to run this aid shock, the following line in the simulation program
should be closed as indicated in the program:
summary table, Niger-Output Table-SHOCK7.xls, and the MDG table, Niger-MDGtable-withaidshock0.52.xls. Niger-output-Aid-Shock-MDG Table 3.xls shows the
deviation from the summary baseline table.
Niger-MDG-table-withaidshock-deviation-aidshock=0.052.xls
presents
the
deviation from the baseline MDG table. This table is given in Appendix I.
Sensitivity Analysis (Partial Efficiency) Baseline MDG Table

In this case, we assume that public investment is partially efficient such that h
is equal to 0.5 in equation (A33) in Appendix E. In order to obtain the simulated data
51
series that will be used to construct the baseline MDG table, open the following lines
in the program:
'line2baseline2 - MDG tables'write(t=xls,b4,t) C:\Niger\OUTPUT-NIGER8.xls AID_0 CG_0 CP_0 PQ_0 DdebtG_0
KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0 TAX_0
X_0 Ydisp_0 Y_0 kappa_edu kappa_hea kappa_inf DB_0 FG_0 FP LAND n PMstar PXstar RD RGstar RPstar tm
UTR$ Delta_NFA_0 ERROR_OMM_0 NGDP_0 KGedu_0 LE_P_0 LE_G_0 DITXR_0 INDTXR_0 YTOT_0
The name of the output file is OUTPUT-NIGER8.xls. This file is used to

calculate the summary table in Niger-Output Table-BASELINE-MDG 2. The MDG
table in a case of partial efficiency is presented in Niger-MDG-table-baseline 2.xls
Sensitivity Analysis (Partial Efficiency) MDG Tables with Aid

Shock
In addition to a lower partial efficiency parameter, a permanent increase in the
aid-to-GDP ratio by 5 percentage points (i.e. 0.05) is introduced, starting in 2006. The
original value of the ratio of aid to GDP is taken to be equal to 10.67 % up to 2006.
Its value will increase to 10.67% + 5% = 15.67% in 2006. The variable introducing
this shock in the simulation program is AID_GDP_MDGSHOCK.
While running the aid shock, open the following line:
'line 1 MDG AID SHOCK after 2005'niger.append AID = NGDP*AID_GDP_MDGSHOCK
'line 2 MDG AID SHOCK after 2005'write(t=xls,b4,t) C:\Niger\output-niger-shock9.xls AID_0 CG_0 CP_0 PQ_0
DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0 IP_0
J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0
Close the following line:

52

summary table, Niger-Output Table-SHOCK9.xls, and the MDG table, Niger-MDGtable-withaidshock-partial efficiency.xls. Niger-output-Aid-Shock-MDG Table partial
efficiency.xls shows the deviation from the summary baseline table.
Sensitivity Analysis (Partial Efficiency) MDG Tables for

Cancellation of Public External Debt
It is assumed that the outstanding stock of Nigers external debt is cancelled in
2006, and that in the following years new borrowing occurs only at a very low
effective interest rate, of 0.2 percent. We assume that the savings associated with
lower interest payments (which represent about 0.52 percent of GDP in 2006) are
reallocated entirely to public investment.
While running the debt relief shock, open the following lines:

'line 5 - debt relief shock partial efficiency'write(t=xls,b4,t) C:\Niger\output-niger-shock10.xls AID_0 CG_0 CP_0
PQ_0 DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0
IP_0 J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0
'line 1 - debt relief shock'niger.append GTOT = WG*LE_G + PQT*(CG + IG) + DUMMY1*RGstarlow*ER*FdebtG(1) + RD*DdebtG(-1)
'line 2 - debt relief shock'niger.append IG = (-0.174921+0.649353*(TAX(-1)/(NGDP(-1)))+1.549799*(AID/NGDP)3.26115*(AID/NGDP)^2)*NGDP/PQT + IGRESIDUALFORDEBT
'line 3 - debt relief shock'niger.append delta_NFA = PXstar*X - PMstar*M - DUMMY1*RGstarlow*FdebtG(-1) RPstar*FdebtP(-1) + UTR$ + (AID$ +AID_RES) + FG + FP+ERROR_OMM
'line 4 - debt relief shock'niger.append FdebtG = FG + DUMMY1*FdebtG(-1)
'line 5 - debt relief shock partial efficiency'write(t=xls,b4,t) C:\Niger\output-niger-shock10.xls AID_0 CG_0 CP_0
PQ_0 DdebtG_0 DOM_0 ER FdebtG_0 FdebtP_0 FdebtTot_0 GBAL_0 GTOT_0 IG_0 IGedu_0 IGhea_0 IGinf_0
53
IP_0 J_0 KGedu_0 KGhea_0 KGinf_0 KP_0 LE_0 LR_0 M_0 PD_0 PM_0 POP_0 PX_0 PY_0 Qd_0 Q SP_0 T_0
Close the following lines:
niger.append GTOT = WG*LE_G + PQT*(CG + IG) + RGstar*ER*FdebtG(-1) + RD*DdebtG(-1)

niger.append IG = (-0.174921+0.649353*(TAX(-1)/(NGDP(-1)))+1.549799*(AID/NGDP)3.26115*(AID/NGDP)^2)*NGDP/PQT + IG_RES
niger.append delta_NFA = PXstar*X - PMstar*M - RGstar*FdebtG(-1) - RPstar*FdebtP(-1) + UTR$ + (AID$
+AID_RES) + FG + FP+ERROR_OMM
niger.append FdebtG = FG + FdebtG(-1)

summary table, Niger-Output Table-SHOCK10.xls, and the MDG table, NigerMDG-table-withdebtshock-partial efficiency.xls. Niger-output-Debtrelief-Shock-Table
- partial efficiency.xls shows the deviation from the summary baseline table.
XI. LINKING THE MODEL WITH THE DECOMPOSITION OF PUBLIC CAPITAL
EXPENDITURE TABLE
54
REFERENCES
Agnor, Pierre-Richard, Nihal Bayraktar, and Karim El Aynaoui, Roads out of
Poverty? Assessing the Links between Aid, Public Investment, Growth, and Poverty
Reduction, World Bank Working Paper No: 3490, (January 2005).
Agnor, Pierre-Richard, Nihal Bayraktar, Emmanuel Pinto Moreira, and Karim
El Aynaoui, Achieving the Millennium Development Goals in Sub-Saharan Africa,
World Bank Working Paper No: ???, (October 2005).
Chiang Alpha C., Fundamental Methods of Mathematical Economics, 3rd
Edition, McGraw-Hill/Irwin, (1984).
Pinto Moreira, Emmanuel and Nihal Bayraktar, A Macroeconomic Framework
for Quantifying Growth and Poverty Reduction Strategies in Niger World Bank
Working Paper No: 3506, (January 2005).
55
APPENDIX A Definitions
This appendix defines the types of functions and parameters used in the
manual. Chiang (1984) gives detailed information on them.
1. Constant Elasticity of Substitution (CES) Production Function
An example of this type of function is given below:
Q = A[K(-) + (1-).L(-)](-1/)
(A3-1)
where Q is output, K is the capital stock, and L is labor. A is the shift or efficiency
parameter, is the share parameter, and is the substitution parameter. Each input
has a constant substitution parameter. The major properties of this type of functions
are that they are homogenous of degree of one and display constant returns to scale.
2. Substitution parameter ()
It determines the elasticity of substitution. See the definition elasticity of
substitution below.
3. Elasticity Substitution ()
From the first order condition obtained by maximizing production function (e.g.
Equation (A3-1)) given the cost of production function, the elasticity of substitution ()
is equal to 1/(1+ ) for CES production functions. It measures the effect of a change
in the price ratio of inputs on the least-cost input combination in order to produce the
same level of given output. Assuming that w is the price of labor and r is the price of
capital, the elasticity of substitution between K and L can be defined as
= Relative change in (K/L)/ Relative change in (w/r)

As w increases, the K/L ratio also increases since K, which is relatively cheaper
now, will be substituted for L.
4. Shift parameter (A)
For given values of inputs, the magnitude of A will proportionately affect the
level of output. It is also named as efficiency parameter as an indicator of the state of
the technology.
5. Distribution parameter ()
It shows the relative shares of inputs in the production.
6. Constant Elasticity of Transformation (CET) Functions
56
These functions define the allocation of any output between alternative uses.
In the example below output Y is allocated between exports, X, and domestic sales,
DOM, according to a CET function
Y = A[X-T + (1 - )DOM-T](1//T)
(A3-2)
Their properties are similar to the properties of CES functions. T is the

transformation parameter.
7. Transformation parameter (T)
It determines the elasticity of transformation.
8. Elasticity of Transformation (T)
From the first order condition obtained by maximizing output function (e.g.
Equation (A3-2) given the total cost of products, the elasticity of substitution is equal
to 1/(1+ T) for CET functions. It measures the effect of a change in the price ratio of
alternative outputs on the optimal output combination in order to produce the same
level of given input. Assuming that PD is the price of DOM and PX is the price of X,
the elasticity of transformation between DOM and X can be defined as
T = Relative change in (X/DOM)/ Relative change in (PD/PX)

As PD increases, X/DOM drops, since DOM, which is relatively more expensive
now, will be produced more compared to X.
9. Types of Variables
a. Exogenous variables: Variables determined out of the model.
These are given variables.
b. Endogenous variables: Variables determined within the model.
They can be a function of exogenous and endogenous variables.
57
Appendix B - List of Variables and Parameter Estimates

Endogenous Variables
Variable
EViews
Name
AID
Definition
DITAX
DITXR
DOM
EQPD
Total aid measured in domestic-currency

terms
CP
Total private consumption in real terms
CG
Real public spending on consumption
DdebtG
Domestic public debt stock (direct
borrowing)
Delta_NFA Change in net foreign assets of the
central bank
DITAX
Direct tax revenue
DITXR
Effective direct tax rate
DOM
Domestic sales
EQPD
Equilibrium value of PD
FdebtG
FdebtG
Stock of public foreign debt
FdebtP
FdebtTot
FG
GBAL
GTOT
IG
IGedu
FdebtP
FdebtTot
FG
GBAL
GTOT
IG
IGedu
Stock of private foreign debt

Total external debt
Flow of government borrowing abroad
Government budget balance
Total government expenditure
Real public investment
Real public investment in education
IGhea
IGinf
IGoth
IGhea
IGinf
IGoth
INDTAX
INDTXR
IP
J
INDTAX
INDTXR
IP
J
KGedu
KGhea
KGinf
KGZ
KP
LE, LEN
LEP
KGedu
KGhea
KGinf
KGZ
KP
LE,
delta_LEN
LE_P
Real public investment in health

Real public investment in infrastructure
Real public investment in other
categories
Indirect tax revenue
Effective indirect tax rate
Real private spending on investment
Composite input from the supply of
composite input T and private capital, KP
Stock of public capital in education
Public capital in health
Public capital in infrastructure
Composite public capital in education
Private capital
Total educated labor (stock and flow)
LR
M
LR
M
AID
CP
CG
DdebtG
NFA
Quantity of educated labor used in

private production
Raw labor
Demand for imported goods (in real
58
NGDP
PD
PM
POP
PQ, PQT
NGDP
PD
PM
POP
PQ, PQT
PX
PY
Qd
PX
PY
Qd
Q
SP
T
Q
SP
T
TAX
X
Ydisp
TAX
X
Ydisp
YTOT
Z
YTOT
Z
terms)
Nominal gross domestic product
Price of the domestic good
Domestic-currency price of imports
Size of the population
Composite price index (before and after
indirect taxes)
Domestic-currency price of exports
GDP deflator
Total demand for goods sold on the
domestic market (which includes both
imports and domestically-produced
goods)
Domestic sales
Private savings
Effective labor; composite input from
the supply of educated labor, LE, and
the stock of public capital in health,
Kghea
Total tax revenue
Exports (in real terms)
Households disposable income in
nominal terms
Aggregate supply of domestic goods (in
real terms)
Total income before taxes
Composite public education input
59
Exogenous Variables
Variable
EViews Name
Kappa_h
LEG
LE_G
NMCG
NMCG
PM*
PX*
RD
PMstar
PXstar
RD
RG*
RP*
RGstar
RPstar
tm
UTR$
WG
tm
UTR$
WG
Definition
Share of public investment in h with

h = edu, hea, inf, oth and h = 1
Kappa
Share of teachers in LE_G
AID$
AID$
Total aid measured in US dollars
terms
DB
DB
Flow of direct domestic borrowing
ER
ER
Nominal exchange rate
ERROR_OMM ERROR_OMM Errors and omissions
FP
FP
Private capital inflows
LAND
LAND
Land (normalized to unity)
Quantity of educated labor
employed by the public sector
Growth rate of population and raw
labor
Real public spending on other
goods and services
World price of imports
World price of exports
Interest rate on domestic public
debt
Interest rate on public foreign debt
Interest rate on private foreign
borrowing
Tariff rate
Private unrequired transfers
Average effective wage in the public
sector
60
Parameters and Estimated Values

Variable
h
KGE
EViews
Name
alpha_h
theta_KGE
Definition
KGI
theta_KGI
theta_H
theta_I
ADE
ADE
ADM
AE
ADM
AE
AJ
AKGZ
AJ
AKGZ
Partial efficiency parameter of IG

Parameter capturing congestion effects
in the education system
in the education system
Parameter determining the strength of
congestion effects in the provision of
health services
on infrastructure capital
Shift parameter in production of
domestic goods Ys
shift parameter in production of Qs
Shift parameter in flow production of
educated labor LE
Shift parameter for composite input J
Shift parameter for composite input KGZ
AT
AT
Shift parameter for composite input T
AY
AY
AZ
AZ
Shift parameter for in the production

function
Shift parameter for in Z
DE
beta_DE
DM
beta_DM
beta_E
beta_J
KGZ
T
beta_KGZ
beta_T
beta_Y
Z
h
beta_Z
delta_h
Share parameter between exports EXP

and domestic sales DOM in production
of domestic goods Ys
Share parameter between imports M and
demand for domestic goods DOM
Share parameter between educated
labor LE and public capital in education,
Kgedu in flow production of LE
Share parameter between the supply of
T and the stock of private capital, KP in
production of J
Share parameter in production of KGZ
educated labor, LE, and the stock of
public capital in health, Kghea in
production of T
J and public capital in infrastructure,
Kginf in production of Ys
Share parameter in equation Z
Depreciation rate of public capital with h
61
P
DE
DM
E
J
KGZ
T
Y
Z
s
DE
DM
E
J
KGZ
T
Y
Z
= edu, hea, inf

delta_P
Constant rate of depreciation of private
capital
rho_DE
transformation parameter in production
of domestic goods Ys
rho_DM
Substitution parameter in Qs
rho_E
Substitution parameter in flow production
of LE
rho_J
Substitution parameter in production of J
rho_KGZ
Substitution parameter in production of
KGZ
rho_T
Substitution parameter in production of T
rho_Y
Substitution parameter in production of
domestic output
rho_Z
Substitution parameter in production of Z
s
Marginal propensity to save
sigma_DE
= 1/(1-DE); elasticity of transformation
between exports and domestic sales
sigma_DM = 1/(1+DM); elasticity of substitution
between imports and demand for
domestic goods
sigma_E
= 1/(1+E); elasticity of substitution
between LR-1 and KGedu/(LR-1)E
sigma_J
= 1/(1+J); elasticity of substitution
between T and KP
sigma_KGZ = 1/(1+KGZ); elasticity of substitution
between KGedu and KGinf
sigma_T
= 1/(1+T); elasticity of substitution
between LE and Kghea/POPH
sigma_Y
= 1/(1+Y); elasticity of substitution
between J and KGinf/Y-1I
sigma_Z
= 1/(1+Z); elasticity of substitution
between between LE_G and KGedu
62
APPENDIX C Estimation Results

This appendix reports the estimation results for Equations (1) to (4). The estimation
technique is ordinary least squares. The regressions are corrected for serial
correlation with autoregressive processes of order one and/or two, denoted AR(1)
and AR(2). The definitions of the equations and variables are given in Pinto Moreira
and Bayraktar (2005).
Estimation results for 11
PQTIP/NGDP = IP((Y/Y-1) -2, KGinf/Y, ERFP/NGDP)
Dependent Variable: PQT.IP/NGDP
Method: Least Squares
Sample(adjusted): 1982 2002
Included observations: 21 after adjusting endpoints
Convergence achieved after 120 iterations
Variable
Coefficient
Std. Error
t-Statistic
Prob.
Constant term
(Y/Y-1) -2
PQT.KGinf/NGDP
ERFP/NGDP
Dummy-87
Dummy-92_95
AR(1)
AR(2)
0.001554
0.056452
0.083040
0.033393
-0.028385
-0.027295
0.829831
-0.353888
0.026338
0.026889
0.058769
0.178805
0.007331
0.006753
0.304689
0.278302
0.058985
2.099476
1.413001
0.186756
-3.871750
-4.042141
2.723535
-1.271594
0.9539
0.0559
0.1811
0.8547
0.0019
0.0014
0.0174
0.2258
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
0.812020
0.710799
0.007544
0.000740
77.86455
1.893319
Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)
0.032714
0.014028
-6.653767
-6.255853
8.022309
0.000717
Inverted AR Roots
.41 -.43i
.41+.43i
Note: Since private investment variable fluctuates a lot in year 1987 and years between 1992 and
1995, dummy variables are used for these years. Dummy-87 is 1 in 1987, 0 otherwise. Dummy-92_95
is 1 in 1992-95, 0 otherwise.
11
Note that the coefficient of (KGinf.PQT/NGDP) is taken as 0.15304 in the simulation program since
the lower value of the coefficient was producing lower IP.
63
Estimation results for

INDTXR = INDTXR(INDTXR-1, AID/NGDP)
Dependent Variable: INDTXR
Variable
Coefficient
Std. Error
t-Statistic
Prob.
Constant term
INDTXR-1
AID/NGDP
AR(1)
0.007920
0.706572
-0.029834
-0.350974
0.002764
0.091551
0.014422
0.260495
2.865322
7.717805
-2.068596
-1.347332
0.0133
0.0000
0.0591
0.2009
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
Inverted AR Roots
0.790924
0.742676
0.002121
5.85E-05
82.81077
1.861421
Mean dependent var

S.D. dependent var
Schwarz criterion
F-statistic
Prob(F-statistic)
0.014905
0.004181
-9.271855
-9.075805
16.39279
0.000105
-.35
Estimation results for 12

PQTIG/NGDP = IG[(TAX/NGDP)-1, AID/NGDP, (AID/NGDP)2]
Dependent Variable: PQTIG/NGDP
Variable
Coefficient
Std. Error
t-Statistic
Prob.
Constant term
(TAX/NGDP)-1
AID/NGDP
(AID/NGDP)2
AR(1)
AR(2)
-0.174921
1.449353
1.549799
-4.261150
0.527316
-0.420780
0.074946
0.428763
0.655702
1.958849
0.299184
0.250577
-2.333958
3.380316
2.363574
-2.175334
1.762515
-1.679246
0.0418
0.0070
0.0397
0.0547
0.1085
0.1240
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat
Inverted AR Roots
0.702030
0.553044
0.011756
0.001382
52.15174
1.888750
.26 -.59i
Mean dependent var

S.D. dependent var
Schwarz criterion
F-statistic
Prob(F-statistic)
0.058565
0.017584
-5.768968
-5.479247
4.712076
0.017978
.26+.59i
12
Note that the coefficient of (TAX/NGDP)-1 is taken as 0.649353 in the simulation program since the
higher value of the coefficient was producing extremely sensitive results to changes in the tax to
NGDP ratio. Similarly, the coefficient of (AID/NGDP)2 is taken as -3.26115 in order to reduce the
negative effect of the square term of aid on IG.
64
APPENDIX D EViews Commands Used in the Program and

Their Meanings
The following definition of the EViews command used in the simulation program
for Niger is presented in this appendix. These definitions are taken from the help
menu of EViews Version 4.1.
CREATE Command
Create a new workfile.
Syntax
Command:
create optional_name frequency start end
You may provide an optional name for your workfile. If you do not, EViews will
create an untitled workfile.
You must specify the frequency, and the starting and ending dates of your data.
For undated data, you should specify the starting and ending observation numbers.
Options
You must choose one of the following options to specify the frequency of your
workfile:
a
s
q
m
w
d
7
u
Annual
Semi-annual
Quarterly
Monthly
Weekly
Daily (5 day week)
Daily (7 day week)
Undated or irregular
Examples
create a 1880 90
creates an annual workfile from 1880 to 1990.

create m 1990:1 2010:12
creates a monthly workfile from January 1990 to December 2010.

create w 2/10/1951 3/17/1994
creates a weekly workfile from the week starting February 10, 1951 to the week
starting March 17, 1994.
65
create u 1 5000
creates an undated workfile with 5000 observations.
SCALAR Command
Declare a scalar object.
The scalar command declares a scalar object and optionally assigns a value.
Syntax
Command:
scalar scalar_name
Command:
scalar scalar_name=assignment
The scalar keyword should be followed by a valid name, and optionally, by an

assignment. If there is no explicit assignment, the scalar will be assigned a value of
zero.
Examples
scalar alpha
declares a scalar object named ALPHA with value zero.

equation eq1.ls res c res(-1 to -4) x1 x2
scalar lm=eq1.@regobs*eq1.@r2
show lm
runs a regression, saves the as a scalar named LM, and displays its value in the
status line at the bottom of the EViews window.
READ Command
Read data from a foreign disk file.
The "read" command may be used to read multiple series into a workfile from a
file on disk. When used as a procedure, read imports data directly into pool and
matrix objects.
Syntax
66
Command:
read(options) path\file_name name1 name2 name3
Command:
read(options) path\file_name n
Coef Proc:
coef_name.read(options) path\file_name
Pool Proc:
pool_name.read(options) path\file_name n1? n2? n3?
Matrix Proc: matrix_name.read(options) path\file_name

You must supply the name of the source file. If you do not include the optional
path specification, EViews will look for the file in the default directory. The input
specification follows the source file name. Path specifications may point to local or
network drives. If the path specification contains a space, you may enclose the entire
expression in double quotation marks.
In the command proc form of read, there are two ways to specify the input
series. First, you may list the names of the series in the order they appear in the file.
Second, if the data file contains a header line for the series names, you may specify
the number n of the series in the file instead of a list of names; EViews will name the
series as given in the header line. If you specify a number and the data file does not
contain a header line, EViews will name the series as SER01, SER02, SER03, and
so on.
For the pool proc form of read, you must provide a list of ordinary or pool series.
Options
File type options
t=dat, txt
ASCII (plain text) files.
t=wk1, wk3 Lotus spreadsheet files.
t=xls Excel spreadsheet files.
If you do not specify the "t" option, EViews uses the file name extension to
determine the file type. If you do specify the "t" option, then the file name extension
will not be used to determine the file type.
Options for ascii text files
na=
Specify text for NAs. Default is "NA".
byper Panel data organized by date/period. Default is data organized by
cross-section (only for pool read).
bycross (default)
Panel data organized by cross-section (only for pool read).
t Read by series (or transpose the data for matrix objects). Default is to read by
observation with series in columns.
d=t
Treat tab as delimiter.
67
d=c
Treat comma as delimiter.
d=s
Treat space as delimiter.
d=a
Treat alpha numeric characters as delimiter.
custom=
Specify symbol/character to treat as delimiter.
mult
Treat multiple delimiters as one.
name Series names in file.
label= Number of lines between the header line and the data. Must be used
with the "name" option.
rect(default) Treat file layout as rectangular.
norect Do not treat file layout as rectangular.
skipcol=
Number of columns to skip. Must be used with the "rect" option.
skiprow=
Number of rows to skip. Must be used with the "rect" option.
comment=
Specify character/symbol to treat as comment sign. Everything to
the right of the comment sign is ignored. Must be used with the "rect" option.
singlequote Strings are in single quotes, not double quotes.
dropstrings
Do not treat strings as NA; simply drop them.
negparen
Treat numbers in parentheses as negative numbers.
allowcomma Allow commas in numbers (note that using commas as a
delimiter takes precedence over this option).
currency=
Specify symbol/character for currency data.
Options for spreadsheet (Lotus, Excel) files
_number (default=b2)
Coordinate of the upper-left cell containing data.
s=_name
Sheet name for Excel 5-8 Workbooks.
cross-section (only for pool read).
bycross (default)
Panel data organized by cross-section (only for pool read).
t Read by series (or transpose the data for matrix objects). Default is to read by
observation with each series in columns.
Examples
read(t=dat,na=.) a:\mydat.raw id lwage hrs
reads data from an ASCII file MYDAT.RAW in the A drive. The data file is listed by
observation, NA is coded as a "." (dot or period), and there are three series, which
are to be named ID, LWAGE, HRS in this order from left to right.
read(a2,s=sheet3) cps88.xls 10
reads data from an Excel file CPS88 in the default directory. The data are organized
by observation, the upper left data cell is A2, and 10 series are read from a sheet
named SHEET3.
read(a2, s=sheet2) "\\network\dr 1\cps91.xls" 10
reads the Excel file CPS91 from the network drive specified in the path.
68
SERIES Command
Series of observations. An EViews series contains a set of observations on a
variable.
To declare a series, use the keyword series, followed by a name, and
optionally, by an "=" sign and a valid series expression:
series y
series x=3*z
If there is no assignment, the series will be initialized to contain NAs.

Series Views
bar
bar graph of the series.
bdstest BDS independence test.

cdfplot distribution (cumulative, survivor, quantile) functions.
correl
correlogram, autocorrelation and partial autocorrelation functions.
edftest empirical distribution function tests.

freq
one-way tabulation.
hist
descriptive statistics and histogram.
kdensity
kernel density estimate.
label
label information for the series.
line
line graph of the series.
qqplot quantile-quantile plot.

seasplot
seasonal line graph.
sheet
spreadsheet view of the series.
spike
spike graph.
statby statistics by classification.

69
stats
descriptive statistics and histogram.
testby equality test by classification.

teststat simple hypothesis tests.
uroot
unit root test.
Series Procs
displayname set display name.
hpf
Hodrick-Prescott filter.
seas
seasonal adjustment only for quarterly and monthly time series.
resample
resample from the observations in the series.
smooth exponential smoothing.

tramoseats
seasonal adjustment using Tramo/Seats.
x11
seasonal adjustment by Census X11 method only for quarterly and
monthly time series.
x12
seasonal adjustment by Census X12 method only for quarterly and
monthly time series.
Series Data Members
(i)
i-th element of the series from the beginning of the workfile (when used
on the left-hand side of an assignment, or when the element appears in a matrix,
vector, or scalar assignment).
Series Element Functions
@elem(ser, j) function to access the j-th observation of the series SER, where j
identifies the date or observation.
Series Examples
You can declare a series in the usual fashion:
series b=income*@mean(z)
series blag=b(1)
70
Note that the last example, above, involves a series expression so that B(1) is
treated as a one-period lead of the entire series, not as an element operator. In
contrast,
scalar blag1=b(1)
evaluates the first observation on B in the workfile.

Once a series is declared, views and procs are available:
a.qqplot
a.statby(mean, var, std) b
To access individual values:

scalar quarterlyval = @elem(y, "1980:3")
scalar undatedval = @elem(x, 323)
GENR Command
Generate series using pool objects.
This procedure allows you to generate multiple series using the cross-section
identifiers in a pool. To generate values for a single series, see series.
Syntax
Pool Proc:
pool_name.genr ser_name = expression
You may use the cross section identifier "?" in the series name and/or in the
expression on the right-hand side.
Examples
The commands
pool pool1
pool1.add 1 2 3
pool1.genr y? = x? - @mean(x?)
are equivalent to generating separate series for each cross-section:

series y1 = x1 - @mean(x1)
71
Similarly,
pool pool2
pool2.add us uk can
pool2.genr y_? = log(x_?)-log(x_us)
generates three series Y_US, Y_UK, Y_CAN that are the log differences from X_US.
Note that Y_US=0.
The pool genr command simply loops across the cross-section identifiers,
performing the appropriate substitution. Thus, the command
pool2.genr z=y_?
is equivalent to entering
series z=y_us
series z=y_uk
series z=y_can
so that the ordinary series Z will contain Y_CAN, the last series associated with the
"Y_?".
SMPL Command
Set sample range.
The smpl command sets the workfile sample to use for statistical operations
and series assignment expressions.
Syntax
Command:
smpl start1 end1 start2 end2 ... if_condition
Command:
smpl sample_name
List the date or number of the first observation and the date or number of the
last observation for the sample. Rules for specifying dates are given in Date Formats.
smpl may contain more than one pair of beginning and ending observations.
72
The smpl command also allows you to select observations on the basis of
conditions specified in an if statement. This enables you to use logical operators to
specify what observations to include in EViews' procedures. Put the if statement after
the pairs of dates.
You can also use smpl to set the current observations to the contents of a
named sample object; put the name of the sample object after the command smpl.
Special keywords for smpl
The following "@-keywords" can be used in a smpl command:
@all The whole workfile range.
@first The first observation in the workfile.
@last The last observation in the workfile.
Examples
smpl 1955:1 1972:12
sets the workfile sample from 1955:1 to 1972:12

smpl @first 1940 1946 1972 1975 @last
excludes observations (or years) 1941-1945 and 1973-1974 from the workfile
sample.
smpl if union=1 and edu<=15
sets the sample to those observations where UNION takes the value 1 and EDU is
less than or equal to 15.
sample half @first @first+@obs(x)/2
smpl half
smpl if x>0
smpl @all if x>0
The first line declares a sample object named HALF which includes the first half
of the series X. The second line sets the sample to HALF and the third line sets the
sample to those observations in HALF where X is positive. The last line sets the
sample to those observations where X is positive over the full sample.
MODEL Command
73
Set of simultaneous equations used for forecasting and simulation.

Declare an object by entering the keyword model, followed by a name:
model mymod
declares an empty model named MYMOD. To fill MYMOD, open the model and edit
the specification view, or use the append view. Note that models are not used for
estimation of unknown parameters.
Model Views
block
display model block structure.
eqs
view of model organized by equation.
label
view or set label information for the model.
msg
display model solution messages.
text
show text showing equations in the model.
trace
view of trace output from model solution.
vars
view of model organized by variable.
Model Procs
addassign
assign add factors to equations.
addinit initialize add factors

append append a line of text to a model.
control solve for values of control variable so that target matches trajectory.
displayname set display name.
exclude specifies (or merges) excluded series to the active scenario.
makegraph
make graph object showing model series.
makegroup
make group out of model series and display dated data table.
merge merge other objects into the model.

override
specifies (or merges) override series to the active scenario.

74
scenario
solve
solve the model.
solveopt
spec
set the active, alternate, or comparison scenario.
set solve options for model.
Displays the text specification view.
Model Examples
The commands
model mod1
mod1.append y=324.35+x
mod1.append x=-234+7.3*z
mod1.solve(m=100,c=.008)
create, specify, and solve the model MOD1. The command

mod1(g).makegraph gr1 x y z
plots the endogenous series X, Y, and Z, in the active scenario for model MOD1.
APPEND Command
Append a specification line to a model, system, sspace, or var.
Syntax
Object Proc: object_name.append text
Var Proc:
var_name.append(options) text
Type the text to be added after the append keyword. For vars, you must specify
the text type in the options argument.
Options for Vars
One of the following options is required when using append as a var proc:
svar
Text for identifying restrictions for structural VAR.

75
coint Text for restrictions on the cointegration relations and/or adjustment

coefficients.
Examples
model macro2
macro2.merge eq_m1
macro2.merge eq_gdp
macro2.append assign @all f
macro1.append @trace gdp
macro2.solve
The first line declares a model object. The second and third lines merge existing
equations into the model. The fourth and fifth line appends an assign statement and
a trace of GDP to the model. The last line solves the model.
system macro1
macro1.append cons=c(1)+c(2)*gdp+c(3)*cons(-1)
macro1.append inv=c(4)+c(5)*tb3+c(6)*d(gdp)
macro1.append gdp=cons+inv+gov
macro1.append inst tb3 gov cons(-1) gdp(-1)
macro1.gmm
show macro1.results
The first line declares a system. The next three lines appends the specification
of each endogenous variable in the system. The fifth line appends the list of
instruments to be used in estimation. The last two lines estimate the model by GMM
and display the estimation results.
vector(2) svec0=0
sspace1.append @mprior svec0
This command appends a line in the state space object SSPACE1 to use the
zero vector SVEC0 as initial values for the state vector.
STATUSLINE Command
Send text to the status line.
76
Displays a message in the status line at the bottom of the EViews main window.
The message may include text, control variables, and string variables.
Syntax
Command:
statusline
Examples
statusline Iteration Number: !t
Displays the message "Iteration Number: !t" in the status line replacing "!t" with
the current value of the control variable in the program.
SOLVE Command
Solve the model.
solve finds the solution to a simultaneous equation model for the set of
observations specified in the current workfile sample.
Syntax
Command:
solve(options)
Model Proc: model_name.solve(options)

Note: When solve is used in a program (batch mode) models are always solved
over the workfile sample. If the model contains a solution sample, it will be ignored in
favor of the workfile sample.
You should follow the name of the model after the solve command or use solve
as a procedure of a named model object. The default solution method is dynamic
simulation. You may modify the solution method as an option.
solve first looks for the specified model in the current workfile. If it is not
present, solve attempts to fetch a model file (.DBL) from the default directory or, if
provided, the path specified with the model name.
Options
solve can take any of the options available in solveopt.
Examples
77
solve mod1
solves the model MOD1 using the default solution method.

nonlin2.solve(m=500,e)
solves the model NONLIN2 with an extended search of up to 500 iterations.
WRITE Command
Write series to a disk file.
The write command creates a foreign format disk file containing any number of
series. You should use write when you wish to export EViews data to another
program.
Syntax
Command:
write(options) path\file name1 name2 name3 ...
Pool Proc:
pool_name.write(options) path\file n1? n2? n3? ...
Coef Proc:
coef_name.write(options) path\file
Matrix Proc: matrix_name.write(options) path\file

Follow the write keyword by a name for the output file and list the series to be
written. The optional path name may be on the local machine, or may point to a
network drive. If the path name contains spaces, enclose the entire expression in
double quotation marks. To write matrix objects, simply provide a filename; the entire
matrix will be exported.
Note that EViews cannot, at present, write into an existing file. The file that you
select will, if necessary, be replaced.
Options
Options are specified in parentheses after the write keyword and are used to
specify the format of the output file.
File type
t=dat, txt
ASCII (plain text) files.
t=wk1, wk3 Lotus spreadsheet files.
t=xls Excel spreadsheet files.
78
If you omit the "t=" option, EViews will determine the type based on the file
extension. Unrecognized extensions will be treated as ASCII files. For Lotus and
Excel spreadsheet files specified without the "t=" option, EViews will automatically
append the appropriate extension if it is not otherwise specified.
ASCII text files
na=text Specify text for NAs. Default is "NA".
dates Write dates/obs and (for pool) cross section identifiers.
nodates (default)
Do not write dates/obs and (for pool) cross-section
identifiers.
names (default)
Write series names.
nonames
Do not write series names.
id
Write cross-section identifier.
d=s
Single space delimiter (default is tab).
d=c
Comma delimiter (default is tab).
cross-section (only for pool write).
bycross (default)
Panel data organized by cross-section (only for pools).
t Write by series (or transpose the data for matrix objects). Default is to read by
obs with series in columns.
Spreadsheet (Lotus, Excel) files
letter_number Coordinate of the upper-left cell containing data.
dates (default) Write dates/obs and (for pool) cross-section identifiers.
dates=first
Write date in Excel date format converting to the first day of the
corresponding observation if necessary (only for Excel files).
dates=last
Write date in Excel date format converting to the last day of the
corresponding observation if necessary (only for Excel files).
nodates
Do not write dates/obs and (pool) cross-section identifiers.
names (default)
Write series names.
nonames
Do not write series names.
cross-section (only for pool write).
bycross (default)
Panel data organized by cross-section (only for pools).
t Write by series (or transpose the data for matrix objects). Default is to write by
obs with each series in columns.
Examples
write(t=txt,na=.,d=c,dates) a:\dat1.csv hat1 hat_se1
Writes the two series HAT1 and HAT_SE1 into an ASCII file named DAT1.CSV
on the A drive. The data file is listed by observations, NAs are coded as "." (dot),
each series is separated by a comma, and the date/observation numbers are written
together with the series names.
79
write(t=txt,na=.,d=c,dates) dat1.csv hat1 hat_se1
writes the same file in the default directory.

mypool.write(t=xls,per) "\\network\drive a\growth" gdp? edu?
writes an Excel file GROWTH.XLS in the specified directory. The data are organized
by observations and are listed by period/time.
STOP Command
Break out of program.
The stop command halts execution of a program. It has the same effect as
hitting the F1 (break) key.
Syntax
Command:
stop
80
APPENDIX E - List of Equations

Production of Goods
T(LEP, KGhea, POP) = AT[TLEP-T + (1 - T)(KGhea/POPH)-T]-1/T
(A1)
J(T, KP) = AJ[JT-J + (1 - J)KP-J]-1/J
(A2)
Y(J, Kginf,Y-1) = AY[YJ-Y + (1 - Y)(KGinf-1/Y-1I) -Y]-1/Y
(A3)
Y = ADE[DEXDE + (1 - DE)DOMDE]1/DE
(A4)
PYY = PDDOM + PXX
(A5)
X/DOM = {(PX/PD)[(1 - DE)/DE]}DE
(A6)
Population and Labor Supply

POP = (1+n)POP-1
(A7)
LR = (1+n)LR-1
(A8)
KGZ(KGinf, KGedu)
= AKGZ[KGZ{KGinf/YKGI}-KGZ + (1 - KGZ){KGedu/LRKGE} -KGZ]-1/KGZ,
(A9)
Z(LEG, KGZ) = AZ[Z(LEG)-Z + (1 - Z)(KGZ-1) -Z]-1/Z,
(A10)
LEN = AE[E(LR-1)-E + (1 - E)(Z)-E]-1/E

LE = LE-1 + LEN
81
(A11)
(A12)
LEP = LE - LEG
(A13)
Income and Private Expenditure

YTOT = PYY + WGLEG - RP*ERFdebtP-1 + RDDdebtG-1 + ERUTR$
(A14)
Ydisp = YTOT - DITAX
(A15)
CP = (1 - s)Ydisp/PQT
(A16)
PQTIP/NGDP = IP((Y/Y-1) -2, KGinf/Y, ERFP/NGDP)
(A17)
KP = IP-1 + (1 - P)KP-1
(A18)
Qd = (CP+CG) + (IP+IG)
(A19)
Q = ADM[DMDOM-DM + (1 - DM)M-DM]-1/DM
(A20)
PQQ = PDDOM + PMM
(A21)
M/DOM = {(PD/PM)[(1 - DM)/DM]}DM
(A22)
Aid, Government Budget, and GDP at Market Prices

GTOT = WGLEG + PQT(CG + IG) + RG*ERFdebtG-1 + RDDdebtG-1
(A23)
GBAL = TAX + AID - GTOT
(A24)
TAX = DITAX + INDTAX + tmERPM*M
(A25)
AID = ERAID$
(A26)
82
DdebtG = DB + DdebtG-1
(A27)
IG = IGedu + IGhea + IGinf + IGoth
(A28)
IGh = hIG
(A29)
DITAX = DITXRYTOT
(A30)
INDTAX = INDTXR(INDTXR-1, AID/NGDP)PQQ
(A31)
CG = NMCG + h.hKGh-1,
h = edu, hea, inf
PQTIG/NGDP = ig[(TAX/NGDP)-1, AID/NGDP, (AID/NGDP)^2]

KGh = h.IGh-1 + (1 - h)KGh-1, h = edu, hea, inf
NGDP = PYY + INDTAX + tmERPM*M
(A32)
(A33)
(A34)
Balance of Payments and Foreign Debt

PX*X - PM*M - RG*FdebtG-1 - RP*FdebtP-1 + UTR$
(A35)
+ AID$ + FG + FP - NFA = 0
FdebtP = FP + FdebtP-1
(A36)
FdebtG = FG + FdebtG-1
(A37)
FdebtTot = FdebtP + FdebtG
(A38)
Market Equilibrium and Prices

Q = Qd
83
(A39)
PQ = APQ[DMPD1-DM + (1 - DM)PM1-DM] 1/(1-DM)
(A40)
PQT = (1+INDTXR)PQ
(A41)
PY = [DE PX1+DE + (1 - DE) PD1+DE] 1/(1+DE).
(A42)
PD = PD.EQPD + (1-PD).PD-1,
PX = ERPX*
PM = (1+tm)ERPM*
(A43)
(A44)
(A45)
Deficit Financing and Private Savings

- GBAL = DB + ERFG
(A46)
SP = sYdisp
(A47)
84
APPENDIX F Simple Example Model

This appendix gives information about a simple model and how we can code a
program to simulate this model in Eviews. If you do not have any experience in
Eviews, it would be best to go over this appendix before you study the actual model.
The simple model defined in this appendix is a two-equation Keynesian model.
The first equation is the income (Y) function:
Y = Consumption + I + G
where Consumption is private consumption, I is private investment, and G is total
government spending. The second equation is the consumption function:
Consumption = alpha_con + beta_con * Y
where alpha_con is autonomous consumption, and beta_con is the marginal
propensity to consume.
In this model, I and G are exogenous variables, which are determined outside
of the model, and alpha_con and beta_con are parameters. The variables
determined within the model, or endogenous variables, are Y and Consumption.
The starting period or base year is 1 in this example. The model is simulated
between period 2 and period 5. The starting and projected values (between period 2
and 5) of exogenous variables are given in EXOG.xls file. Different values can be
assigned as projected values of exogenous variables. In this example, period 1
values are used as projected values throughout our simulation period. The starting
values of endogenous variables are given in ENDO.xls file. After we run the
simulation program, the results will be written in output.xls file.
ENDO.xls
ENDOGENOUS
variable name Definition
income
Y
Consumption aggregate consumption
Time Period
-1
1 2 3
starting values
1750.00
1450.00
EXOG.xls
Exogenous Variables
I
G
Time Period
Definition
investment
government spending
-1
100.00 100.00 100.00 100.00 100.00

200.00 200.00 200.00 200.00 200.00
The simulation program written in Eviews is in Model.prg and also written

below.
85
' ----------------------------------' Demonstration Model: Keynesian Model

' coded in EViews by Nihal Bayraktar
' ----------------------------------create C:\Niger\simple-simulation-program\KeynesianModel U 5
smpl 1 5
'-----------------------'IMPORTING DATA: EXOGENOUS VARIABLES AND PARAMETERS

read(e3, t) C:\Niger\simple-simulation-program\exog.xls I G
' IMPORTING DATA: ENDOGENOUS VARIABLES

read(e3, t) C:\Niger\simple-simulation-program\endo.xls Y Consumption
'-----------------------'PARAMETERS
scalar beta_con = 0.8 ' marginal propensity to consume
'-----------------------'CALIBRATED PARAMETER
series Y
series Consumption
scalar alpha_con = Consumption(1) - beta_con*Y(1) ' autonomous consumption
'-----------------------model KC
'----------------------S I M U L A T I O N ------------------------' AGGREGATE INCOME IDENTITY

KC.append Y = Consumption + I + G
' CONSUMPTION FUNCTION

KC.append Consumption = alpha_con + beta_con * Y
'------------------smpl 2 5
solve(m = 20000, c = 0.001) KC
smpl 1 5
write(e3, t) C:\Niger\simple-simulation-program\output.xls Y_0 Consumption_0 I G
86
The commands used in this simple program and their meanings are
summarized below. Similar commands are used in the actual model.
create C:\Niger\simple-simulation-program\KeynesianModel U 5
Create an EViews workfile named as KeynesianModel

U stands for undated data frequency. Since our data file and the simulation
program covers the period between 1 and 5, we write 5 after U.
smpl 1 5
Sample range
scalar beta_con = 0.8
The parameters are defined as a constant number in the simulation program.

The scalar command guarantees that the parameters are kept constant
throughout the simulation period.
series Y
In order to calculate a scalar number (it is alpha_con in our case), variables

that are used in calculating the scalar need to be defined as series.
After Y is defined as series, Y(1) corresponds to the value of Y in Period 1.
read(e3,t) C:\Niger\simple-simulation-program\exog.xls I G
Importing exogenous variables and parameters from EXOG.xls

Options
e3: coordinates of the upper left cell of the data matrix in the Excel
spreadsheet.
t : when our data series are in rows rather than in columns.
read(e3, t) C:\Niger\simple-simulation-program\endo.xls Y Consumption
Importing endogenous variables from ENDO.xls
model KC
Creates a model named as KC

87
KC.append Y = Consumption + I + G
KC.append Consumption = alpha_con + beta_con * Y
Append command to specify our equations
NATIONAL INCOME IDENTITY: Y = Consumption + I + G
CONSUMPTION FUNCTION: Consumption = alpha_con + beta_con * Y
solve(m = 20000, c = 0.001) KC
Trigger Eviews to solve a model.

Eviews finds a solution to a simultaneous equation model using available data.
Options
m = integer : maximum number of iterations to be executed.
c = number : convergence criterion for the solution of the dynamic
simulation.
KC: name of our model.
write(e3, t) C:\Niger\simple-simulation-program\output.xls Y_0

Consumption_0 I G
Export variables from EViews into an external file

Y_0 and Consumption_0: simulated values of Y and Consumption
EXERCISE: In order to better understand how the simulation program works, it

is suggested to study how the results change as the projected values of exogenous
variables and/or parameters change.
88
APPENDIX G Tables of Simulation Results

TABLE 3 BASELINE
Table 3
Niger: Trend-based Projections, 2004-15
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Real Sector (in billions of current CFA francs)

Total supply of goods and services
Gross domestic product at factor cost
Imports of goods and NFS (inclusive of tariffs)
Total expenditure on goods and services
Total consumption
Private consumption
Public spending on goods and services
Total investment
Private investment
Public investment
Exports of goods and NFS
2084.7
1587.5
497.2
2084.7
1623.3
1375.4
247.9
217.5
133.9
83.6
244.0
2203.1
1706.6
496.6
2274.7
1758.9
1479.6
279.3
243.8
147.1
96.6
272.0
2408.2
1872.7
535.5
2501.3
1938.2
1625.8
312.3
255.5
158.4
97.1
307.6
2672.1
2082.4
589.6
2783.8
2163.4
1810.9
352.5
272.7
168.4
104.3
347.7
2988.6
2332.5
656.1
3117.8
2430.9
2031.9
399.0
295.9
183.4
112.6
391.0
3349.1
2616.0
733.1
3489.6
2732.9
2282.7
450.1
320.3
198.9
121.4
436.5
3746.0
2927.1
818.9
3892.8
3063.2
2558.0
505.2
345.4
214.4
131.0
484.2
4172.7
3260.6
912.1
4321.9
3416.8
2853.3
563.5
371.0
229.8
141.1
534.2
4624.2
3612.6
1011.6
4773.3
3789.6
3165.0
624.6
396.8
245.1
151.7
586.8
5096.8
3980.4
1116.4
5244.2
4179.0
3490.7
688.3
422.9
260.2
162.6
642.3
5588.0
4362.0
1226.0
5733.4
4583.2
3828.8
754.4
449.1
275.3
173.8
701.1
6096.5
4756.4
1340.1
6240.1
5001.2
4178.4
822.8
475.5
290.3
185.2
763.4
Gross domestic product at market prices

Disposable income
1627.8
1624.0
1828.6
1748.0
2033.7
1918.7
2283.3
2133.4
2575.6
2389.0
2898.0
2678.5
3245.3
2995.9
3613.3
3336.0
3998.8
3694.9
4400.1
4069.7
4816.0
4458.5
5246.2
4860.5
Poverty rate
Ravallion's (2004) adjusted elasticity (Gini = 50.5)
Consumption per capita growth elasticity of -0.5
66.5
64.6
66.1
67.7
65.9
64.3
65.6
66.9
64.2
63.5
64.0
64.5
61.6
62.4
61.8
61.1
58.8
61.1
59.2
57.3
55.8
59.8
56.7
53.6
53.1
58.5
54.2
50.1
50.6
57.3
51.9
46.9
48.3
56.1
49.9
44.1
46.3
55.1
48.1
41.7
44.6
54.2
46.5
39.7
43.1
53.4
45.1
37.9
External Sector (% of GDP)

Current account
Trade balance
Imports of goods and NFS
Private unrequited transfers
Income (net)
Public
Private
Aid, total
Other current account flows (net)
Capital account
Foreign direct investment
Public borrowing
Other private flows (Errors and omissions)
-6.0
-9.6
15.0
24.6
0.7
-0.4
-0.6
0.1
10.7
-7.3
6.0
0.5
3.5
2.0
-2.6
-7.0
14.9
21.9
0.7
-0.4
-0.5
0.1
10.7
-6.5
5.6
0.0
3.6
2.0
-1.1
-6.1
15.1
21.2
0.6
-0.4
-0.5
0.1
10.7
-5.9
5.2
0.0
3.2
2.0
0.0
-5.6
15.2
20.8
0.6
-0.4
-0.5
0.1
10.7
-5.2
5.0
0.0
3.0
2.0
0.8
-5.4
15.2
20.5
0.5
-0.3
-0.5
0.1
10.7
-4.6
4.9
0.0
2.8
2.0
1.4
-5.3
15.1
20.4
0.5
-0.3
-0.4
0.1
10.7
-4.1
4.7
0.0
2.6
2.0
1.7
-5.4
14.9
20.4
0.4
-0.3
-0.4
0.1
10.7
-3.7
4.5
0.0
2.5
2.0
1.9
-5.6
14.8
20.4
0.4
-0.3
-0.4
0.1
10.7
-3.3
4.4
0.0
2.3
2.0
2.1
-5.7
14.7
20.4
0.4
-0.3
-0.4
0.1
10.7
-3.0
4.2
0.0
2.2
2.0
2.2
-5.9
14.6
20.5
0.4
-0.3
-0.4
0.1
10.7
-2.7
4.1
0.0
2.0
2.0
2.3
-6.0
14.6
20.5
0.3
-0.2
-0.4
0.1
10.7
-2.5
4.0
0.0
1.9
2.0
2.4
-6.1
14.6
20.6
0.3
-0.2
-0.3
0.1
10.7
-2.3
3.9
0.0
1.8
2.0
Government Sector (% of GDP)

Total revenue (including grants)
Domestic taxes
Direct taxes
Indirect taxes
Indirect taxes on imports
Foreign aid (grants)
Total expenditure
Spending on goods and services (total)
Maintenance spending
Other spending on goods and services
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Overall fiscal balance including grants (cash basis)
Total financing
Foreign financing
Domestic borrowing
21.2
4.6
2.0
2.6
5.9
10.7
40.6
15.6
0.9
14.6
3.6
5.1
0.6
0.1
0.6
-3.9
3.9
3.5
0.4
20.7
4.8
1.9
2.9
5.3
10.7
40.8
15.7
1.0
14.6
3.6
5.3
0.6
0.1
0.5
-4.6
4.6
3.6
1.0
20.8
5.0
1.9
3.1
5.1
10.7
40.6
15.8
1.1
14.6
3.6
4.8
0.6
0.1
0.5
-4.2
4.2
3.2
1.0
20.8
5.1
1.9
3.2
5.0
10.7
40.6
15.9
1.3
14.6
3.6
4.6
0.5
0.1
0.5
-4.0
4.0
3.0
1.0
20.8
5.2
1.9
3.3
4.9
10.7
40.5
16.0
1.3
14.6
3.6
4.4
0.5
0.1
0.5
-3.8
3.8
2.8
1.0
20.8
5.3
1.9
3.4
4.9
10.7
40.4
16.0
1.4
14.6
3.6
4.2
0.5
0.1
0.4
-3.6
3.6
2.6
1.0
20.8
5.3
1.9
3.4
4.9
10.7
40.3
16.1
1.4
14.6
3.6
4.0
0.5
0.1
0.4
-3.5
3.5
2.5
1.0
20.9
5.3
1.9
3.5
4.9
10.7
40.2
16.1
1.5
14.6
3.6
3.9
0.5
0.1
0.4
-3.3
3.3
2.3
1.0
20.9
5.4
1.9
3.5
4.9
10.7
40.1
16.1
1.5
14.6
3.6
3.8
0.4
0.1
0.4
-3.2
3.2
2.2
1.0
21.0
5.4
1.9
3.5
4.9
10.7
40.0
16.2
1.5
14.6
3.6
3.7
0.4
0.1
0.4
-3.0
3.0
2.0
1.0
21.0
5.4
1.9
3.5
4.9
10.7
40.0
16.2
1.5
14.6
3.6
3.6
0.4
0.1
0.4
-2.9
2.9
1.9
1.0
21.0
5.4
1.9
3.5
4.9
10.7
39.9
16.2
1.6
14.6
3.6
3.5
0.4
0.1
0.3
-2.8
2.8
1.8
1.0
Prices and Real Exchange Rate

GDP at factor cost deflator (% change)
Composite good price (after indirect taxes, % change)
Real exchange rate (% change)
-2.9
0.7
15.2
3.4
3.7
-0.7
4.1
4.1
-1.1
4.5
4.4
-1.4
4.6
4.4
-1.4
4.5
4.3
-1.3
4.2
4.0
-1.0
3.8
3.7
-0.7
3.4
3.3
-0.3
3.0
3.0
0.0
2.7
2.8
0.2
2.5
2.6
0.4
2.3
-1.5
-0.4
10.0
-4.9
8.2
61.6
12.7
17.7
37.4
10.7
34.2
50.3
48.2
7.9
65.1
3.8
45.5
18.3
1064.5
1145.3
83.6
0.6
5.4
0.7
9.6
0.8
8.0
60.4
12.9
17.7
37.4
10.7
34.2
51.4
49.6
8.1
62.0
3.6
42.0
19.2
1032.1
1239.8
93.5
2.1
3.8
2.3
9.4
2.4
7.8
62.0
11.8
17.7
37.4
10.7
34.2
51.4
44.8
8.2
59.4
3.4
41.5
19.9
1080.6
1361.3
90.4
3.2
4.6
3.5
9.3
3.5
7.4
61.8
11.3
17.7
37.4
10.7
34.2
51.3
42.8
8.3
56.4
3.2
41.1
20.8
1155.2
1493.9
93.2
3.8
5.1
4.3
9.3
4.1
7.1
62.0
10.8
17.7
37.4
10.7
34.2
51.3
41.0
8.4
53.3
3.0
40.7
21.7
1248.0
1630.8
96.5
4.1
4.9
4.5
9.2
4.4
6.9
62.1
10.4
17.7
37.4
10.7
34.2
51.2
39.3
8.5
50.5
2.9
40.4
22.6
1353.8
1767.6
99.8
4.1
4.7
4.6
9.2
4.4
6.6
62.1
10.0
17.7
37.4
10.7
34.2
51.2
37.8
8.6
48.1
2.8
40.2
23.5
1468.3
1903.6
103.6
4.0
4.4
4.4
9.2
4.2
6.4
62.0
9.7
17.7
37.4
10.7
34.2
51.1
36.6
8.7
46.0
2.7
40.0
24.4
1587.8
2039.1
107.8
3.9
4.0
4.1
9.2
3.9
6.1
61.8
9.5
17.7
37.4
10.7
34.2
51.0
35.6
8.8
44.2
2.6
40.0
25.3
1709.6
2174.6
112.1
3.6
3.7
3.8
9.2
3.6
5.9
61.5
9.2
17.7
37.4
10.7
34.2
50.9
34.7
9.0
42.7
2.5
40.0
26.1
1831.8
2311.1
116.7
3.4
3.4
3.5
9.3
3.3
5.7
61.3
9.0
17.7
37.4
10.7
34.2
50.8
33.8
9.3
41.4
2.4
40.0
26.9
1953.1
2449.1
121.3
3.1
3.1
3.1
9.3
3.0
5.5
61.1
8.8
17.7
37.4
10.7
34.2
50.8
33.1
9.5
40.4
2.3
40.1
27.6
2072.6
2588.9
126.0
Memorandum items
Real GDP per capita at factor cost (% change)
Real GDP per capita at market prices (% change)
Real disposable income per capita (% change)
Private savings rate (% of GDP)
Real private consumption per capita (% change)
Private investment (% of GDP)
Private investment (% of total investment)
Public investment (% of total public expenditure)
Health (% of public investment)
Infrastructure (% of public investment)
Education (% of public investment)
Other (% of public investment)
Aid (% of total revenue)
Total public investment (% of aid)
Domestic debt (% of GDP)
External debt (% of GDP)
Interest payment on external public debt (% of exports)
Degree of openness (total trade in % of GDP)
Educated labor (in % of population)
Real imports (in billions of current CFA francs)
Real exports (in billions of current CFA francs)
Real public investment (in billions of current CFA francs)
Note: The real exchange rate is defined as the growth rate of nominal exchange rate plus the growth rate of the import price index minus the growth rate of composite good price after indirect taxes.
The adjusted elasticity formula proposed by Ravallion (2004) is -9.3*(1-Gini)^3 = -1.13 where Gini index is 50.5 for Niger.
89
TABLE 4 AID SHOCK (SHOCK 1)

Table 4
Niger: 5 Percent Increase in Aid to GDP Ratio, 2005-15
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.51
3.72
2.78
7.03
4.61
3.97
8.00
31.41
3.34
74.15
0.88
6.75
7.05
5.72
9.89
8.00
7.45
10.85
35.24
8.71
78.53
0.73
10.54
10.95
9.08
13.81
12.24
11.51
15.94
41.79
13.98
86.71
1.67
14.88
15.43
12.91
18.21
16.97
16.13
21.26
48.29
19.39
95.36
3.16
19.68
20.38
17.19
23.05
22.13
21.19
26.91
55.56
25.35
105.05
4.96
24.78
25.63
21.75
28.12
27.54
26.53
32.68
63.26
31.49
115.27
6.69
30.03
31.02
26.50
33.29
33.05
31.98
38.47
71.12
37.63
125.67
8.56
35.25
36.37
31.24
38.38
38.49
37.38
44.13
79.02
43.65
136.16
10.19
40.37
41.62
35.91
43.35
43.80
42.65
49.63
86.91
49.55
146.69
11.71
45.32
46.69
40.46
48.14
48.91
47.73
54.92
94.65
55.28
157.00
13.26
50.08
51.55
44.84
52.72
53.82
52.60
60.01
102.31
60.91
167.20
14.64

Disposable income
0.00
0.00
8.18
3.68
10.96
6.94
15.02
10.82
19.56
15.28
24.57
20.23
29.74
25.44
35.03
30.80
40.20
36.13
45.22
41.34
50.09
46.40
54.71
51.23
Poverty rate
0.00
0.00
0.00
0.00
-0.69
-0.30
-0.61
-0.93
-1.21
-0.53
-1.07
-1.62
-2.00
-0.89
-1.78
-2.65
-3.01
-1.37
-2.68
-3.91
-4.10
-1.93
-3.68
-5.24
-5.18
-2.52
-4.67
-6.48
-6.16
-3.10
-5.60
-7.55
-7.01
-3.65
-6.42
-8.44
-7.75
-4.16
-7.14
-9.15
-8.37
-4.62
-7.76
-9.71
-8.90
-5.05
-8.29
-10.17

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Private borrowing
Public borrowing
Errors and omissions
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5.56
0.09
-1.00
-1.09
-0.05
0.03
0.04
-0.01
5.00
0.49
-1.46
0.00
-1.46
0.00
5.18
-0.39
-1.39
-1.00
-0.06
0.05
0.06
-0.01
5.00
0.58
-1.75
0.00
-1.75
0.00
4.98
-0.69
-1.77
-1.07
-0.07
0.07
0.09
-0.01
5.00
0.68
-1.61
0.00
-1.61
0.00
4.82
-0.94
-2.08
-1.14
-0.08
0.09
0.10
-0.02
5.00
0.76
-1.56
0.00
-1.56
0.00
4.65
-1.16
-2.37
-1.21
-0.09
0.10
0.12
-0.02
5.00
0.81
-1.52
0.00
-1.52
0.00
4.47
-1.40
-2.65
-1.25
-0.10
0.11
0.13
-0.02
5.01
0.84
-1.51
0.00
-1.51
0.00
4.26
-1.61
-2.90
-1.29
-0.10
0.12
0.14
-0.02
5.00
0.85
-1.50
0.00
-1.50
0.00
4.04
-1.84
-3.14
-1.30
-0.11
0.13
0.15
-0.02
5.00
0.85
-1.49
0.00
-1.49
0.00
3.82
-2.06
-3.37
-1.31
-0.11
0.14
0.16
-0.02
5.01
0.84
-1.48
0.00
-1.48
0.00
3.60
-2.25
-3.57
-1.32
-0.11
0.14
0.17
-0.02
5.00
0.83
-1.47
0.00
-1.47
0.00
3.39
-2.45
-3.77
-1.31
-0.11
0.15
0.17
-0.03
5.00
0.80
-1.46
0.00
-1.46
0.00

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Spending on goods and services
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Overall fiscal balance
Total financing
Foreign financing
Domestic borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4.49
-0.25
-0.08
-0.17
-0.26
5.00
2.91
-0.05
-0.05
0.00
-0.17
3.22
-0.04
0.00
-0.04
1.46
-1.46
-1.46
0.00
4.42
-0.34
-0.07
-0.27
-0.24
5.00
2.56
-0.05
-0.05
0.00
-0.17
2.91
-0.07
-0.01
-0.06
1.75
-1.75
-1.75
0.00
4.33
-0.41
-0.07
-0.34
-0.26
5.00
2.73
0.08
0.08
0.00
-0.17
2.85
-0.09
-0.01
-0.09
1.61
-1.61
-1.61
0.00
4.27
-0.45
-0.07
-0.38
-0.27
5.00
2.82
0.17
0.17
0.00
-0.17
2.77
-0.11
-0.01
-0.10
1.56
-1.56
-1.56
0.00
4.22
-0.48
-0.07
-0.42
-0.29
5.00
2.88
0.23
0.23
0.00
-0.17
2.71
-0.13
-0.01
-0.12
1.52
-1.52
-1.52
0.00
4.21
-0.50
-0.06
-0.44
-0.30
5.01
2.94
0.29
0.29
0.00
-0.17
2.66
-0.14
-0.01
-0.13
1.51
-1.51
-1.51
0.00
4.19
-0.51
-0.06
-0.45
-0.31
5.00
2.97
0.34
0.34
0.00
-0.17
2.62
-0.16
-0.01
-0.14
1.50
-1.50
-1.50
0.00
4.18
-0.51
-0.05
-0.45
-0.31
5.00
3.01
0.38
0.38
0.00
-0.17
2.60
-0.16
-0.01
-0.15
1.49
-1.49
-1.49
0.00
4.19
-0.51
-0.05
-0.46
-0.31
5.01
3.06
0.41
0.41
0.00
-0.18
2.58
-0.17
-0.01
-0.16
1.48
-1.48
-1.48
0.00
4.18
-0.50
-0.05
-0.46
-0.32
5.00
3.09
0.44
0.44
0.00
-0.18
2.57
-0.18
-0.01
-0.17
1.47
-1.47
-1.47
0.00
4.19
-0.50
-0.04
-0.46
-0.32
5.00
3.15
0.47
0.47
0.00
-0.18
2.57
-0.19
-0.01
-0.17
1.46
-1.46
-1.46
0.00

0.00
0.00
0.00
3.85
2.98
-2.98
3.34
2.61
-2.61
3.34
2.65
-2.65
3.24
2.59
-2.59
3.08
2.49
-2.49
2.87
2.33
-2.33
2.63
2.14
-2.14
2.36
1.93
-1.93
2.11
1.73
-1.73
1.88
1.54
-1.54
1.68
1.38
-1.38
Memorandum items
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
6.21
0.98
-0.40
0.92
-0.36
-12.89
6.51
0.00
0.00
0.00
0.00
10.68
4.75
-0.53
-5.84
-0.03
-2.36
0.00
28.70
10.88
64.55
0.00
0.24
0.83
-0.34
0.73
-0.16
-12.16
6.04
0.00
0.00
0.00
0.00
10.84
4.26
-0.65
-8.26
-0.10
-2.64
0.00
61.85
9.91
62.27
0.46
1.46
1.39
-0.34
1.18
-0.07
-12.11
5.87
0.00
0.00
0.00
0.00
11.04
4.52
-0.82
-10.58
-0.22
-3.10
0.20
104.91
24.89
67.21
0.98
1.87
1.92
-0.33
1.63
-0.01
-12.07
5.70
0.00
0.00
0.00
0.00
11.20
4.62
-0.98
-12.48
-0.32
-3.50
0.53
161.18
51.47
72.95
1.40
2.22
2.33
-0.32
1.98
0.04
-12.06
5.57
0.00
0.00
0.00
0.00
11.31
4.75
-1.13
-14.07
-0.41
-3.87
0.96
232.72
87.66
79.86
1.69
2.32
2.51
-0.31
2.18
0.09
-12.08
5.48
0.00
0.00
0.00
0.00
11.39
4.88
-1.27
-15.38
-0.49
-4.21
1.47
319.28
127.34
87.85
1.84
2.39
2.62
-0.29
2.26
0.12
-12.13
5.41
0.00
0.00
0.00
0.00
11.42
5.04
-1.40
-16.46
-0.56
-4.49
2.01
420.71
174.64
96.69
1.89
2.31
2.58
-0.27
2.26
0.15
-12.20
5.36
0.00
0.00
0.00
0.00
11.44
5.21
-1.51
-17.35
-0.62
-4.76
2.59
534.15
221.61
106.39
1.88
2.21
2.48
-0.25
2.19
0.18
-12.30
5.34
0.00
0.00
0.00
0.00
11.44
5.40
-1.60
-18.09
-0.68
-5.00
3.18
657.80
270.70
116.88
1.83
2.12
2.38
-0.23
2.09
0.20
-12.40
5.32
0.00
0.00
0.00
0.00
11.43
5.61
-1.68
-18.73
-0.73
-5.20
3.78
790.21
324.77
127.93
1.76
1.98
2.22
-0.21
1.98
0.22
-12.49
5.31
0.00
0.00
0.00
0.00
11.41
5.81
-1.75
-19.28
-0.78
-5.40
4.38
929.31
379.02
139.61
90
TABLE 5 SHOCK TO GOVERNMENT INVESTMENT (SHOCK 2)

Table 5
Niger: 20 Percent Decrease in "Other" Investment in Percent of Total Public Investment
Allocated to 20 Percent Increase in Infrastucture Investment in Percent of Total Public Investment, 2005-15
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.14
0.15
0.12
0.29
0.18
0.16
0.32
1.37
2.08
0.20
0.04
0.86
0.92
0.66
1.25
1.09
0.95
1.79
2.85
4.22
0.64
1.02
2.15
2.27
1.73
2.73
2.56
2.34
3.65
4.37
6.39
1.08
2.57
3.89
4.07
3.25
4.59
4.44
4.17
5.81
6.20
8.92
1.74
4.33
5.88
6.11
5.07
6.62
6.54
6.25
8.04
8.12
11.49
2.61
6.06
7.96
8.22
7.03
8.67
8.68
8.38
10.22
10.04
13.95
3.67
7.65
9.99
10.28
8.96
10.63
10.75
10.46
12.27
11.91
16.24
4.91
9.00
11.92
12.23
10.84
12.48
12.69
12.40
14.16
13.66
18.33
6.20
10.29
13.70
14.01
12.60
14.16
14.46
14.19
15.86
15.28
20.23
7.45
11.42
15.32
15.63
14.22
15.67
16.06
15.80
17.39
16.80
21.97
8.69
12.43

Disposable income
0.00
0.00
0.00
0.00
0.34
0.15
1.43
0.92
3.04
2.28
5.02
4.08
7.15
6.13
9.26
8.24
11.23
10.27
13.09
12.21
14.76
13.98
16.27
15.59
Poverty rate
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.02
-0.01
-0.02
-0.03
-0.36
-0.16
-0.32
-0.48
-0.96
-0.43
-0.85
-1.26
-1.72
-0.80
-1.53
-2.21
-2.50
-1.20
-2.25
-3.16
-3.23
-1.60
-2.93
-4.01
-3.88
-1.98
-3.53
-4.72
-4.42
-2.32
-4.05
-5.29
-4.87
-2.62
-4.49
-5.74
-5.24
-2.89
-4.86
-6.09

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Private borrowing
Public borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.02
0.00
-0.04
-0.05
0.00
0.00
0.00
0.00
0.00
0.02
0.00
0.00
0.00
0.00
0.17
0.10
-0.06
-0.16
-0.01
0.01
0.01
0.00
0.00
0.07
0.06
0.00
0.06
0.00
0.32
0.19
-0.07
-0.26
-0.02
0.01
0.01
0.00
0.00
0.14
0.08
0.00
0.08
0.00
0.43
0.25
-0.10
-0.34
-0.02
0.01
0.02
0.00
0.00
0.20
0.07
0.00
0.07
0.00
0.48
0.24
-0.15
-0.39
-0.03
0.02
0.02
-0.01
0.00
0.24
0.06
0.00
0.06
0.00
0.46
0.20
-0.22
-0.42
-0.03
0.02
0.03
-0.01
0.00
0.28
0.04
0.00
0.04
0.00
0.41
0.12
-0.29
-0.42
-0.04
0.02
0.03
-0.01
0.01
0.30
0.01
0.00
0.01
0.00
0.35
0.04
-0.36
-0.41
-0.04
0.02
0.03
-0.01
0.01
0.31
-0.01
0.00
-0.01
0.00
0.27
-0.04
-0.42
-0.39
-0.04
0.03
0.04
-0.01
0.01
0.32
-0.02
0.00
-0.02
0.00
0.19
-0.12
-0.48
-0.36
-0.04
0.03
0.04
-0.01
0.01
0.32
-0.03
0.00
-0.03
0.00

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Total financing
Foreign financing
Domestic borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.02
0.00
0.00
0.00
-0.01
0.00
-0.02
0.00
0.00
0.00
-0.01
-0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.05
-0.01
-0.01
0.00
-0.04
0.00
0.06
0.06
0.06
0.00
-0.01
-0.04
-0.01
0.00
-0.01
-0.06
0.06
0.06
0.00
-0.09
-0.02
-0.01
-0.01
-0.06
0.00
0.09
0.10
0.10
0.00
0.00
-0.08
-0.01
0.00
-0.01
-0.08
0.08
0.08
0.00
-0.11
-0.03
-0.02
-0.01
-0.08
0.00
0.08
0.12
0.12
0.00
0.00
-0.13
-0.02
0.00
-0.02
-0.07
0.07
0.07
0.00
-0.13
-0.03
-0.02
-0.01
-0.09
0.00
0.07
0.13
0.13
0.00
0.00
-0.17
-0.03
0.00
-0.02
-0.06
0.06
0.06
0.00
-0.13
-0.03
-0.02
-0.01
-0.10
0.00
0.05
0.14
0.14
0.00
0.00
-0.20
-0.03
0.00
-0.03
-0.04
0.04
0.04
0.00
-0.12
-0.03
-0.02
-0.01
-0.10
0.01
0.05
0.15
0.15
0.00
0.00
-0.22
-0.04
0.00
-0.03
-0.01
0.01
0.01
0.00
-0.12
-0.02
-0.01
-0.01
-0.10
0.01
0.04
0.15
0.15
0.00
0.00
-0.23
-0.04
-0.01
-0.03
0.01
-0.01
-0.01
0.00
-0.11
-0.02
-0.01
-0.01
-0.09
0.01
0.03
0.15
0.15
0.00
0.00
-0.23
-0.04
-0.01
-0.04
0.02
-0.02
-0.02
0.00
-0.10
-0.02
-0.01
0.00
-0.09
0.01
0.03
0.16
0.16
0.00
-0.01
-0.23
-0.04
-0.01
-0.04
0.03
-0.03
-0.03
0.00

0.00
0.00
0.00
0.00
0.00
0.00
0.16
0.13
-0.13
0.44
0.36
-0.36
0.65
0.53
-0.53
0.77
0.63
-0.63
0.79
0.64
-0.64
0.73
0.59
-0.59
0.62
0.51
-0.51
0.52
0.42
-0.42
0.41
0.33
-0.33
0.31
0.25
-0.25
Memorandum items
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
20.00
0.00
-20.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.25
0.04
-0.02
0.03
0.14
0.44
-0.01
0.00
20.00
0.00
-20.00
0.04
-0.06
-0.02
-0.19
0.00
-0.10
0.00
1.26
0.52
0.07
0.36
0.86
0.50
-0.05
0.46
0.20
0.82
-0.10
0.00
20.00
0.00
-20.00
0.13
-0.33
-0.10
-0.68
-0.03
-0.26
0.15
7.68
15.22
0.15
0.76
1.26
0.97
-0.07
0.90
0.23
1.20
-0.23
0.00
20.00
0.00
-20.00
0.21
-0.78
-0.20
-1.30
-0.07
-0.39
0.41
21.59
41.87
0.09
1.08
1.53
1.34
-0.08
1.23
0.25
1.59
-0.35
0.00
20.00
0.00
-20.00
0.27
-1.22
-0.32
-1.95
-0.10
-0.53
0.74
44.00
76.54
0.14
1.29
1.62
1.55
-0.09
1.42
0.27
1.93
-0.44
0.00
20.00
0.00
-20.00
0.31
-1.60
-0.43
-2.55
-0.13
-0.64
1.12
74.44
115.45
0.39
1.38
1.60
1.62
-0.09
1.49
0.27
2.20
-0.51
0.00
20.00
0.00
-20.00
0.32
-1.87
-0.53
-3.04
-0.15
-0.73
1.52
111.56
156.07
0.90
1.39
1.49
1.58
-0.08
1.47
0.28
2.39
-0.55
0.00
20.00
0.00
-20.00
0.33
-2.04
-0.61
-3.43
-0.16
-0.81
1.93
153.24
195.70
1.73
1.34
1.41
1.51
-0.07
1.40
0.27
2.53
-0.57
0.00
20.00
0.00
-20.00
0.31
-2.13
-0.67
-3.73
-0.17
-0.87
2.33
198.62
237.77
2.76
1.27
1.29
1.40
-0.06
1.30
0.27
2.63
-0.58
0.00
20.00
0.00
-20.00
0.29
-2.17
-0.73
-3.95
-0.18
-0.90
2.73
246.15
279.57
3.93
1.18
1.18
1.29
-0.05
1.20
0.27
2.70
-0.58
0.00
20.00
0.00
-20.00
0.27
-2.18
-0.77
-4.10
-0.18
-0.93
3.11
294.68
321.70
5.26
91
TABLE 6 SHOCK TO TARIFF RATE (SHOCK 3a)

Table 6
Niger: 12 Percent Decrease in Tariff Rate, No Change in Direct or Indirect Tax Rate, 2005-15
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.35
0.52
-3.34
0.18
0.43
0.78
-1.37
-1.50
-1.54
-1.44
0.01
-1.25
-0.61
-3.49
-2.27
-0.83
-0.17
-4.24
-15.54
-2.57
-36.71
-0.31
-2.18
-1.59
-4.26
-3.05
-1.66
-1.01
-5.00
-17.68
-4.51
-38.96
-0.21
-3.35
-2.81
-5.26
-4.26
-2.89
-2.15
-6.64
-20.24
-6.50
-42.63
-0.71
-4.75
-4.27
-6.47
-5.69
-4.37
-3.57
-8.42
-22.63
-8.53
-45.72
-1.53
-6.35
-5.93
-7.89
-7.31
-6.06
-5.21
-10.35
-25.03
-10.72
-48.46
-2.57
-8.09
-7.71
-9.45
-9.03
-7.87
-6.99
-12.33
-27.38
-12.95
-50.88
-3.70
-9.89
-9.56
-11.09
-10.80
-9.74
-8.84
-14.31
-29.64
-15.14
-53.07
-4.88
-11.71
-11.41
-12.77
-12.56
-11.61
-10.70
-16.25
-31.80
-17.26
-55.07
-6.06
-13.49
-13.22
-14.45
-14.28
-13.44
-12.52
-18.10
-33.84
-19.28
-56.91
-7.23
-15.21
-14.96
-16.08
-15.93
-15.19
-14.27
-19.87
-35.77
-21.19
-58.62
-8.37

Disposable income
0.00
0.00
-1.69
0.42
-4.89
-0.68
-5.79
-1.63
-7.13
-2.84
-8.66
-4.30
-10.35
-5.95
-12.13
-7.74
-13.92
-9.58
-15.68
-11.42
-17.38
-13.23
-19.00
-14.97
Poverty rate
0.00
0.00
0.00
0.00
-1.79
-0.77
-1.58
-2.42
-1.73
-0.75
-1.53
-2.31
-1.64
-0.73
-1.45
-2.16
-1.35
-0.62
-1.20
-1.75
-0.90
-0.43
-0.81
-1.14
-0.33
-0.17
-0.30
-0.41
0.30
0.14
0.27
0.39
0.96
0.47
0.87
1.20
1.63
0.82
1.48
1.99
2.28
1.18
2.08
2.76
2.92
1.53
2.67
3.49

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Private borrowing
Public borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.78
-1.68
0.26
1.94
0.01
-0.01
-0.01
0.00
0.01
-0.11
2.66
0.00
2.66
0.00
-2.20
-1.89
0.73
2.62
0.03
-0.05
-0.05
0.01
0.01
-0.30
1.17
0.00
1.17
0.00
-2.05
-1.70
0.90
2.61
0.03
-0.06
-0.06
0.01
0.00
-0.32
1.30
0.00
1.30
0.00
-1.99
-1.61
1.05
2.66
0.04
-0.07
-0.07
0.01
0.00
-0.36
1.25
0.00
1.25
0.00
-1.98
-1.55
1.18
2.73
0.04
-0.08
-0.09
0.01
0.00
-0.39
1.23
0.00
1.23
0.00
-1.97
-1.50
1.30
2.80
0.05
-0.09
-0.10
0.01
0.00
-0.42
1.22
0.00
1.22
0.00
-1.95
-1.45
1.42
2.87
0.06
-0.10
-0.11
0.01
0.00
-0.45
1.21
0.00
1.21
0.00
-1.92
-1.39
1.54
2.93
0.06
-0.11
-0.12
0.01
0.00
-0.48
1.21
0.00
1.21
0.00
-1.86
-1.31
1.66
2.97
0.07
-0.12
-0.13
0.01
0.00
-0.50
1.20
0.00
1.20
0.00
-1.79
-1.22
1.79
3.01
0.07
-0.13
-0.14
0.02
0.00
-0.52
1.20
0.00
1.20
0.00
-1.71
-1.12
1.91
3.03
0.07
-0.13
-0.15
0.02
0.00
-0.53
1.20
0.00
1.20
0.00

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Total financing
Foreign financing
Domestic borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.65
-0.26
0.04
-0.30
-2.39
0.01
0.03
0.00
0.00
0.00
0.00
0.01
0.01
0.00
0.01
-2.66
2.66
2.66
0.00
-2.66
-0.44
0.08
-0.52
-2.23
0.01
-1.40
0.02
0.02
0.00
0.09
-1.60
0.05
0.00
0.05
-1.17
1.17
1.17
0.00
-2.79
-0.60
0.08
-0.69
-2.19
0.00
-1.40
0.02
0.02
0.00
0.10
-1.61
0.07
0.00
0.06
-1.30
1.30
1.30
0.00
-2.86
-0.71
0.09
-0.80
-2.15
0.00
-1.57
-0.04
-0.04
0.00
0.10
-1.67
0.08
0.00
0.07
-1.25
1.25
1.25
0.00
-2.91
-0.79
0.09
-0.88
-2.12
0.00
-1.70
-0.10
-0.10
0.00
0.11
-1.70
0.09
0.00
0.09
-1.23
1.23
1.23
0.00
-2.95
-0.84
0.09
-0.93
-2.10
0.00
-1.80
-0.15
-0.15
0.00
0.11
-1.72
0.10
0.01
0.10
-1.22
1.22
1.22
0.00
-2.98
-0.88
0.09
-0.97
-2.10
0.00
-1.88
-0.19
-0.19
0.00
0.11
-1.72
0.12
0.01
0.11
-1.21
1.21
1.21
0.00
-3.00
-0.90
0.09
-1.00
-2.10
0.00
-1.95
-0.23
-0.23
0.00
0.11
-1.73
0.13
0.01
0.12
-1.21
1.21
1.21
0.00
-3.02
-0.93
0.09
-1.02
-2.10
0.00
-2.01
-0.27
-0.27
0.00
0.12
-1.73
0.14
0.01
0.13
-1.20
1.20
1.20
0.00
-3.04
-0.94
0.09
-1.03
-2.10
0.00
-2.07
-0.30
-0.30
0.00
0.12
-1.73
0.15
0.01
0.14
-1.20
1.20
1.20
0.00
-3.06
-0.95
0.09
-1.05
-2.11
0.00
-2.12
-0.34
-0.34
0.00
0.12
-1.73
0.16
0.01
0.15
-1.20
1.20
1.20
0.00

0.00
0.00
0.00
0.54
-1.93
1.93
-1.17
-1.18
1.18
-1.04
-1.01
1.01
-1.10
-1.01
1.01
-1.13
-1.00
1.00
-1.15
-0.99
0.99
-1.13
-0.97
0.97
-1.10
-0.93
0.93
-1.04
-0.87
0.87
-0.97
-0.81
0.81
-0.88
-0.74
0.74
Memorandum items
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.04
2.38
0.20
2.39
0.01
-0.02
0.02
0.00
0.00
0.00
0.00
7.56
0.09
0.12
3.65
0.00
-0.20
0.00
72.38
0.10
0.11
0.00
-2.44
-0.02
0.42
-0.02
0.19
9.52
-3.66
0.00
0.00
0.00
0.00
7.61
-15.00
0.36
6.44
0.17
1.11
0.00
73.92
-4.20
-31.75
0.00
-0.06
-0.06
0.41
-0.03
0.10
9.88
-3.70
0.00
0.00
0.00
0.00
7.96
-15.07
0.39
7.60
0.20
1.32
0.00
69.25
-3.06
-34.40
-0.20
-0.60
-0.37
0.43
-0.31
0.05
10.68
-3.86
0.00
0.00
0.00
0.00
8.17
-15.66
0.46
8.81
0.26
1.56
-0.09
60.97
-11.61
-38.76
-0.45
-0.85
-0.68
0.44
-0.59
0.01
11.32
-3.94
0.00
0.00
0.00
0.00
8.32
-15.93
0.54
9.99
0.32
1.78
-0.25
47.93
-27.11
-42.84
-0.68
-1.08
-0.94
0.45
-0.84
-0.03
11.85
-3.99
0.00
0.00
0.00
0.00
8.41
-16.08
0.63
11.16
0.38
1.99
-0.47
29.03
-48.84
-46.94
-0.87
-1.24
-1.14
0.46
-1.03
-0.06
12.31
-4.02
0.00
0.00
0.00
0.00
8.48
-16.15
0.73
12.30
0.44
2.19
-0.73
3.99
-75.53
-51.07
-1.02
-1.33
-1.28
0.47
-1.17
-0.09
12.73
-4.04
0.00
0.00
0.00
0.00
8.53
-16.18
0.84
13.42
0.50
2.37
-1.03
-26.87
-106.17
-55.27
-1.12
-1.38
-1.38
0.47
-1.26
-0.11
13.12
-4.05
0.00
0.00
0.00
0.00
8.58
-16.18
0.95
14.50
0.55
2.54
-1.36
-62.89
-140.12
-59.55
-1.19
-1.40
-1.43
0.47
-1.32
-0.13
13.49
-4.06
0.00
0.00
0.00
0.00
8.62
-16.18
1.05
15.52
0.60
2.69
-1.70
-103.24
-177.00
-63.92
-1.23
-1.40
-1.45
0.46
-1.35
-0.15
13.86
-4.07
0.00
0.00
0.00
0.00
8.65
-16.18
1.16
16.50
0.64
2.83
-2.06
-147.10
-216.61
-68.36
92
TABLE 7 SHOCK TO TARIFF RATE (SHOCK 3b)

Table 7
Niger: 12 Percent Decrease in Tariff Rate, Increase in Direct Tax Rate to 4.9 Percent, 2005-15
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.84
-2.14
-5.26
-4.81
-5.53
-5.26
-6.98
-4.38
-3.90
-5.09
-0.56
-4.17
-3.65
-6.02
-5.56
-6.89
-6.74
-7.67
-1.50
-5.14
4.45
-0.51
-5.37
-4.88
-7.12
-6.49
-8.03
-7.93
-8.54
-2.18
-5.78
3.62
-0.31
-6.26
-5.77
-7.99
-7.12
-8.81
-8.78
-8.95
-2.69
-6.25
3.11
0.03
-6.86
-6.37
-8.60
-7.51
-9.31
-9.34
-9.17
-3.05
-6.54
2.68
0.49
-7.22
-6.72
-8.98
-7.71
-9.60
-9.67
-9.24
-3.21
-6.64
2.39
0.97
-7.41
-6.91
-9.18
-7.79
-9.73
-9.83
-9.20
-3.25
-6.62
2.23
1.44
-7.48
-6.98
-9.26
-7.78
-9.75
-9.88
-9.11
-3.20
-6.52
2.16
1.87
-7.47
-6.97
-9.26
-7.71
-9.71
-9.85
-8.98
-3.10
-6.39
2.17
2.26
-7.42
-6.92
-9.20
-7.61
-9.63
-9.78
-8.83
-2.96
-6.24
2.22
2.59
-7.33
-6.83
-9.10
-7.49
-9.52
-9.68
-8.66
-2.80
-6.06
2.31
2.89

Disposable income
0.00
0.00
-7.22
-5.08
-7.89
-6.53
-8.74
-7.71
-9.27
-8.56
-9.58
-9.13
-9.72
-9.48
-9.75
-9.66
-9.70
-9.72
-9.61
-9.71
-9.49
-9.66
-9.35
-9.57
Poverty rate
0.00
0.00
0.00
0.00
1.23
0.53
1.08
1.65
1.43
0.62
1.26
1.92
1.56
0.69
1.38
2.07
1.58
0.72
1.41
2.07
1.51
0.71
1.36
1.94
1.38
0.67
1.25
1.74
1.22
0.61
1.11
1.51
1.05
0.54
0.96
1.28
0.88
0.46
0.80
1.05
0.72
0.39
0.66
0.84
0.57
0.31
0.53
0.66

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Private borrowing
Public borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.28
-1.79
1.07
2.86
0.05
-0.03
-0.04
0.01
0.00
-0.51
-0.52
0.00
-0.52
0.00
-2.01
-1.54
1.21
2.75
0.05
-0.03
-0.04
0.01
0.00
-0.50
0.01
0.00
0.01
0.00
-1.71
-1.23
1.41
2.64
0.05
-0.03
-0.04
0.01
0.00
-0.50
0.00
0.00
0.00
0.00
-1.41
-0.96
1.56
2.52
0.05
-0.03
-0.04
0.01
0.00
-0.47
0.01
0.00
0.01
0.00
-1.16
-0.75
1.68
2.43
0.05
-0.02
-0.03
0.01
0.00
-0.44
0.02
0.00
0.02
0.00
-0.97
-0.60
1.77
2.36
0.05
-0.02
-0.03
0.01
0.00
-0.40
0.02
0.00
0.02
0.00
-0.82
-0.49
1.83
2.32
0.04
-0.02
-0.03
0.01
0.00
-0.36
0.02
0.00
0.02
0.00
-0.71
-0.41
1.88
2.30
0.04
-0.02
-0.03
0.01
0.00
-0.32
0.02
0.00
0.02
0.00
-0.63
-0.36
1.92
2.28
0.04
-0.02
-0.02
0.01
0.00
-0.29
0.02
0.00
0.02
0.00
-0.57
-0.33
1.94
2.27
0.03
-0.02
-0.02
0.01
0.00
-0.26
0.02
0.00
0.02
0.00
-0.52
-0.30
1.97
2.27
0.03
-0.01
-0.02
0.00
0.00
-0.23
0.02
0.00
0.02
0.00

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Total financing
Foreign financing
Domestic borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.86
3.15
3.09
0.06
-2.28
0.00
0.38
0.04
0.04
0.00
0.14
0.12
0.05
0.00
0.04
0.52
-0.52
-0.52
0.00
0.85
3.06
3.01
0.05
-2.22
0.00
0.87
0.04
0.04
0.00
0.12
0.64
0.04
0.00
0.04
-0.01
0.01
0.01
0.00
0.83
3.01
2.96
0.05
-2.18
0.00
0.85
0.04
0.04
0.00
0.11
0.62
0.04
0.00
0.04
0.00
0.00
0.00
0.00
0.81
2.97
2.92
0.04
-2.16
0.00
0.86
0.06
0.06
0.00
0.11
0.60
0.04
0.00
0.04
-0.01
0.01
0.01
0.00
0.78
2.94
2.90
0.03
-2.16
0.00
0.86
0.07
0.07
0.00
0.10
0.57
0.04
0.00
0.03
-0.02
0.02
0.02
0.00
0.76
2.92
2.89
0.03
-2.16
0.00
0.85
0.09
0.09
0.00
0.10
0.54
0.03
0.00
0.03
-0.02
0.02
0.02
0.00
0.74
2.90
2.88
0.03
-2.16
0.00
0.84
0.10
0.10
0.00
0.10
0.52
0.03
0.00
0.03
-0.02
0.02
0.02
0.00
0.73
2.90
2.88
0.02
-2.17
0.00
0.84
0.11
0.11
0.00
0.10
0.50
0.03
0.00
0.03
-0.02
0.02
0.02
0.00
0.71
2.89
2.87
0.02
-2.18
0.00
0.83
0.11
0.11
0.00
0.10
0.48
0.03
0.00
0.02
-0.02
0.02
0.02
0.00
0.70
2.89
2.87
0.02
-2.19
0.00
0.82
0.12
0.12
0.00
0.09
0.47
0.02
0.00
0.02
-0.02
0.02
0.02
0.00
0.69
2.89
2.87
0.02
-2.20
0.00
0.82
0.12
0.12
0.00
0.09
0.45
0.02
0.00
0.02
-0.02
0.02
0.02
0.00

0.00
0.00
0.00
-2.21
-3.83
3.83
-1.61
-1.31
1.31
-1.33
-1.08
1.08
-1.02
-0.83
0.83
-0.77
-0.62
0.62
-0.56
-0.46
0.46
-0.42
-0.34
0.34
-0.31
-0.26
0.26
-0.24
-0.20
0.20
-0.19
-0.16
0.16
-0.15
-0.13
0.13
Memorandum items
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-4.27
-1.63
0.22
-1.63
0.29
0.30
0.17
0.00
0.00
0.00
0.00
-2.05
1.12
0.55
3.99
0.02
1.64
0.00
50.46
-6.94
-1.36
0.00
0.51
-0.36
0.14
-0.32
0.23
-2.29
1.30
0.00
0.00
0.00
0.00
-2.01
5.99
0.55
4.02
-0.03
1.75
0.00
43.72
-6.89
8.90
-0.01
0.04
-0.32
0.11
-0.25
0.24
-2.27
1.26
0.00
0.00
0.00
0.00
-1.97
5.79
0.56
4.11
-0.05
1.87
0.00
32.67
-4.62
9.43
0.04
0.18
-0.20
0.07
-0.13
0.24
-2.27
1.22
0.00
0.00
0.00
0.00
-1.91
5.58
0.55
3.97
-0.07
1.92
0.02
23.17
0.55
10.08
0.11
0.24
-0.07
0.05
-0.01
0.23
-2.24
1.16
0.00
0.00
0.00
0.00
-1.85
5.32
0.51
3.72
-0.09
1.95
0.06
15.99
8.62
10.64
0.17
0.29
0.04
0.02
0.09
0.23
-2.20
1.11
0.00
0.00
0.00
0.00
-1.79
5.07
0.47
3.42
-0.11
1.97
0.12
11.19
18.54
11.23
0.22
0.31
0.12
0.01
0.16
0.22
-2.15
1.06
0.00
0.00
0.00
0.00
-1.75
4.85
0.42
3.10
-0.12
1.99
0.18
8.57
29.44
11.88
0.25
0.31
0.17
0.00
0.20
0.22
-2.12
1.02
0.00
0.00
0.00
0.00
-1.71
4.67
0.38
2.80
-0.14
2.01
0.26
7.77
40.73
12.59
0.26
0.32
0.22
-0.01
0.23
0.21
-2.09
0.99
0.00
0.00
0.00
0.00
-1.67
4.51
0.34
2.52
-0.15
2.01
0.33
8.42
52.15
13.36
0.27
0.30
0.23
-0.02
0.24
0.21
-2.07
0.96
0.00
0.00
0.00
0.00
-1.64
4.37
0.30
2.26
-0.16
2.03
0.41
10.26
63.53
14.17
0.26
0.29
0.23
-0.02
0.24
0.20
-2.05
0.94
0.00
0.00
0.00
0.00
-1.61
4.25
0.26
2.03
-0.17
2.04
0.49
13.01
74.88
15.02
93
TABLE 8 SHOCK TO TARIFF RATE (SHOCK 3c)

Table 8
Niger: 12 Percent Decrease in Tariff Rate, Increase in Indirect Tax Rate to 4.9 Percent, 2005-15
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.15
-1.40
-4.73
-3.44
-3.90
-3.66
-5.15
-3.52
-3.23
-3.95
-0.42
-3.13
-2.55
-5.13
-4.17
-4.82
-4.60
-5.95
-3.86
-4.19
-3.34
-0.33
-4.06
-3.52
-5.96
-4.93
-5.61
-5.40
-6.70
-5.49
-4.91
-6.42
-0.21
-4.84
-4.32
-6.70
-5.57
-6.28
-6.08
-7.29
-6.94
-5.63
-9.08
-0.07
-5.50
-4.99
-7.33
-6.12
-6.86
-6.67
-7.83
-8.18
-6.31
-11.24
0.06
-6.08
-5.58
-7.87
-6.62
-7.39
-7.20
-8.34
-9.26
-6.94
-13.05
0.14
-6.62
-6.13
-8.37
-7.10
-7.89
-7.70
-8.86
-10.24
-7.57
-14.59
0.14
-7.13
-6.66
-8.83
-7.57
-8.38
-8.19
-9.37
-11.15
-8.19
-15.92
0.08
-7.63
-7.17
-9.29
-8.04
-8.87
-8.67
-9.89
-12.00
-8.82
-17.10
-0.03
-8.13
-7.68
-9.74
-8.51
-9.36
-9.16
-10.40
-12.81
-9.44
-18.15
-0.17
-8.61
-8.17
-10.18
-8.96
-9.84
-9.63
-10.90
-13.58
-10.05
-19.12
-0.35

Disposable income
0.00
0.00
-3.19
-1.48
-4.21
-2.60
-5.12
-3.55
-5.85
-4.34
-6.45
-5.01
-7.00
-5.60
-7.51
-6.15
-8.02
-6.67
-8.51
-7.19
-8.99
-7.69
-9.46
-8.18
Poverty rate
0.00
0.00
0.00
0.00
0.43
0.19
0.38
0.58
0.44
0.19
0.39
0.59
0.45
0.20
0.40
0.60
0.47
0.21
0.42
0.61
0.49
0.23
0.43
0.62
0.52
0.25
0.46
0.65
0.56
0.28
0.51
0.70
0.62
0.31
0.56
0.76
0.69
0.36
0.63
0.83
0.77
0.41
0.71
0.92
0.86
0.46
0.79
1.01

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Private borrowing
Public borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.74
-1.53
0.43
1.96
0.02
-0.01
-0.02
0.00
0.01
-0.21
0.00
0.00
0.00
0.00
-1.68
-1.44
0.61
2.05
0.03
-0.02
-0.02
0.01
0.00
-0.26
0.26
0.00
0.26
0.00
-1.51
-1.24
0.79
2.03
0.03
-0.02
-0.03
0.01
0.00
-0.28
0.30
0.00
0.30
0.00
-1.34
-1.06
0.93
1.99
0.03
-0.02
-0.03
0.01
0.00
-0.29
0.32
0.00
0.32
0.00
-1.20
-0.92
1.05
1.97
0.03
-0.03
-0.03
0.01
0.00
-0.28
0.33
0.00
0.33
0.00
-1.10
-0.82
1.14
1.97
0.03
-0.03
-0.03
0.01
0.00
-0.28
0.33
0.00
0.33
0.00
-1.02
-0.75
1.22
1.97
0.03
-0.03
-0.04
0.01
0.00
-0.27
0.33
0.00
0.33
0.00
-0.95
-0.69
1.29
1.98
0.03
-0.03
-0.04
0.01
0.00
-0.26
0.33
0.00
0.33
0.00
-0.90
-0.64
1.35
2.00
0.03
-0.03
-0.04
0.01
0.00
-0.25
0.33
0.00
0.33
0.00
-0.85
-0.60
1.41
2.01
0.03
-0.04
-0.04
0.01
0.00
-0.24
0.33
0.00
0.33
0.00
-0.80
-0.56
1.46
2.02
0.03
-0.04
-0.04
0.01
0.00
-0.24
0.33
0.00
0.33
0.00

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Total financing
Foreign financing
Domestic borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.13
2.51
0.03
2.48
-2.39
0.01
0.04
0.03
0.03
0.00
0.00
-0.04
0.02
0.00
0.02
0.00
0.00
0.00
0.00
-0.06
2.24
0.03
2.21
-2.30
0.00
0.12
0.03
0.03
0.00
0.01
0.04
0.02
0.00
0.02
-0.26
0.26
0.26
0.00
-0.21
2.04
0.03
2.01
-2.25
0.00
0.03
0.03
0.03
0.00
0.01
-0.06
0.03
0.00
0.03
-0.30
0.30
0.30
0.00
-0.32
1.91
0.03
1.88
-2.22
0.00
-0.04
0.03
0.03
0.00
0.01
-0.15
0.03
0.00
0.03
-0.32
0.32
0.32
0.00
-0.40
1.81
0.03
1.78
-2.21
0.00
-0.11
0.03
0.03
0.00
0.02
-0.21
0.04
0.00
0.03
-0.33
0.33
0.33
0.00
-0.46
1.74
0.03
1.72
-2.20
0.00
-0.16
0.02
0.02
0.00
0.02
-0.26
0.04
0.00
0.03
-0.33
0.33
0.33
0.00
-0.51
1.70
0.03
1.67
-2.21
0.00
-0.21
0.02
0.02
0.00
0.02
-0.30
0.04
0.00
0.04
-0.33
0.33
0.33
0.00
-0.55
1.66
0.03
1.64
-2.21
0.00
-0.25
0.01
0.01
0.00
0.02
-0.33
0.04
0.00
0.04
-0.33
0.33
0.33
0.00
-0.58
1.64
0.03
1.61
-2.21
0.00
-0.29
0.00
0.00
0.00
0.02
-0.35
0.04
0.00
0.04
-0.33
0.33
0.33
0.00
-0.60
1.62
0.03
1.59
-2.22
0.00
-0.32
-0.01
-0.01
0.00
0.02
-0.36
0.05
0.00
0.04
-0.33
0.33
0.33
0.00
-0.62
1.61
0.03
1.58
-2.23
0.00
-0.35
-0.02
-0.02
0.00
0.02
-0.38
0.05
0.00
0.04
-0.33
0.33
0.33
0.00

0.00
0.00
0.00
-1.45
-0.98
0.98
-1.22
-1.22
1.22
-1.03
-1.00
1.00
-0.86
-0.81
0.81
-0.72
-0.67
0.67
-0.62
-0.56
0.56
-0.55
-0.49
0.49
-0.49
-0.43
0.43
-0.45
-0.39
0.39
-0.42
-0.36
0.36
-0.38
-0.33
0.33
Memorandum items
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.61
-0.61
0.17
-0.58
0.00
0.18
-0.11
0.00
0.00
0.00
0.00
-0.28
-0.42
0.23
1.91
0.02
-0.01
0.00
56.45
-5.27
-0.82
0.00
0.04
-0.03
0.16
-0.02
0.00
-0.21
0.07
0.00
0.00
0.00
0.00
0.16
0.41
0.29
2.59
0.00
0.36
0.00
54.38
-4.53
0.65
-0.01
-0.07
-0.09
0.15
-0.04
0.02
0.38
-0.16
0.00
0.00
0.00
0.00
0.52
-0.58
0.33
3.14
0.01
0.56
0.00
47.54
-3.14
-1.59
0.00
-0.05
-0.10
0.15
-0.05
0.02
0.87
-0.36
0.00
0.00
0.00
0.00
0.80
-1.41
0.35
3.50
0.01
0.70
0.00
41.08
-1.12
-3.72
-0.01
-0.06
-0.12
0.14
-0.06
0.01
1.27
-0.51
0.00
0.00
0.00
0.00
1.00
-2.01
0.36
3.77
0.01
0.81
-0.01
35.13
1.08
-5.60
-0.03
-0.09
-0.13
0.14
-0.08
0.00
1.59
-0.61
0.00
0.00
0.00
0.00
1.16
-2.46
0.37
3.98
0.02
0.91
-0.02
29.25
2.58
-7.34
-0.06
-0.13
-0.16
0.14
-0.11
0.00
1.84
-0.70
0.00
0.00
0.00
0.00
1.27
-2.80
0.38
4.17
0.03
0.99
-0.04
22.96
2.89
-8.98
-0.09
-0.17
-0.19
0.14
-0.14
-0.01
2.05
-0.76
0.00
0.00
0.00
0.00
1.36
-3.05
0.39
4.35
0.03
1.07
-0.07
15.88
1.83
-10.54
-0.12
-0.20
-0.21
0.13
-0.17
-0.02
2.23
-0.81
0.00
0.00
0.00
0.00
1.43
-3.25
0.40
4.52
0.04
1.14
-0.11
7.79
-0.59
-12.07
-0.15
-0.22
-0.24
0.13
-0.20
-0.03
2.37
-0.84
0.00
0.00
0.00
0.00
1.49
-3.40
0.41
4.69
0.05
1.20
-0.16
-1.41
-4.27
-13.57
-0.17
-0.23
-0.25
0.13
-0.22
-0.04
2.49
-0.87
0.00
0.00
0.00
0.00
1.54
-3.53
0.42
4.86
0.06
1.26
-0.22
-11.70
-9.12
-15.07
94
TABLE 9 BASELINE (Partially efficient IG)

Table 9
Niger: Trend-based Projections, 2004-15, Lower Efficiency of Public Investment
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
2084.7
1587.5
497.2
2084.7
1623.3
1375.4
247.9
217.5
133.9
83.6
244.0
2200.3
1704.3
496.0
2268.9
1756.0
1477.6
278.5
241.0
144.5
96.5
271.9
2387.6
1855.6
532.0
2469.5
1916.2
1610.4
305.8
248.7
152.3
96.4
304.5
2612.6
2033.5
579.1
2703.7
2104.0
1766.9
337.1
261.3
158.2
103.1
338.5
2866.5
2232.8
633.8
2965.8
2314.2
1942.6
371.6
278.4
168.0
110.4
373.2
3140.8
2447.0
693.8
3243.2
2539.5
2131.7
407.8
295.3
177.3
117.9
408.4
3429.6
2671.8
757.8
3532.3
2775.8
2330.4
445.4
312.0
186.3
125.7
444.5
3729.2
2904.3
824.8
3830.8
3020.4
2536.2
484.1
328.5
194.9
133.6
481.9
4037.4
3143.2
894.3
4137.2
3271.5
2747.7
523.8
344.8
203.3
141.5
521.0
4353.4
3387.6
965.8
4451.5
3528.7
2964.2
564.5
360.9
211.5
149.4
561.9
4676.9
3637.5
1039.4
4773.8
3791.9
3185.7
606.2
376.9
219.5
157.4
605.1
5008.3
3893.2
1115.0
5105.0
4061.5
3412.5
649.0
392.9
227.6
165.3
650.6

Disposable income
1627.8
1624.0
1823.1
1745.6
2003.9
1901.1
2209.6
2083.1
2437.3
2286.6
2676.2
2505.2
2923.5
2734.5
3177.9
2971.8
3438.1
3215.4
3704.5
3464.6
3977.4
3719.4
4257.6
3980.2
Poverty rate
66.5
64.6
66.1
67.7
65.9
64.3
65.6
66.9
64.5
63.7
64.3
65.0
62.7
62.9
62.7
62.5
60.7
62.0
61.0
59.9
58.8
61.1
59.3
57.4
57.1
60.4
57.7
55.1
55.5
59.6
56.4
53.2
54.2
59.0
55.1
51.5
53.0
58.4
54.1
50.0
52.0
57.9
53.2
48.7
51.2
57.5
52.4
47.7

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Foreign direct investment
Public borrowing
Other private flows (Errors and omissions)
-6.0
-9.6
15.0
24.6
0.7
-0.4
-0.6
0.1
10.7
-7.3
6.0
0.5
3.5
2.0
-2.7
-7.0
14.9
21.9
0.7
-0.4
-0.5
0.1
10.7
-6.5
5.6
0.0
3.6
2.0
-1.3
-6.2
15.2
21.4
0.6
-0.4
-0.5
0.1
10.7
-5.9
5.1
0.0
3.1
2.0
-0.3
-5.8
15.3
21.1
0.6
-0.4
-0.5
0.1
10.7
-5.4
4.9
0.0
2.8
2.0
0.3
-5.7
15.3
21.0
0.5
-0.4
-0.5
0.1
10.7
-4.9
4.7
0.0
2.6
2.0
0.7
-5.6
15.3
20.9
0.5
-0.3
-0.5
0.1
10.7
-4.4
4.5
0.0
2.4
2.0
1.0
-5.7
15.2
20.9
0.5
-0.3
-0.4
0.1
10.7
-4.1
4.3
0.0
2.3
2.0
1.3
-5.8
15.2
20.9
0.5
-0.3
-0.4
0.1
10.7
-3.7
4.2
0.0
2.1
2.0
1.5
-5.8
15.2
21.0
0.4
-0.3
-0.4
0.1
10.7
-3.5
4.0
0.0
2.0
2.0
1.7
-5.9
15.2
21.0
0.4
-0.3
-0.4
0.1
10.7
-3.2
3.9
0.0
1.9
2.0
1.9
-5.9
15.2
21.1
0.4
-0.3
-0.4
0.1
10.7
-3.0
3.8
0.0
1.8
2.0
2.1
-5.8
15.3
21.1
0.4
-0.3
-0.4
0.1
10.7
-2.8
3.7
0.0
1.7
2.0

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Spending on goods and services (total)
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Overall fiscal balance including grants (cash basis)
Total financing
Foreign financing
Domestic borrowing
21.2
4.6
2.0
2.6
5.9
10.7
40.6
15.6
0.9
14.6
3.6
5.1
0.6
0.1
0.6
-3.9
3.9
3.5
0.4
20.8
4.8
1.9
2.9
5.3
10.7
40.9
15.7
1.0
14.6
3.6
5.3
0.6
0.1
0.5
-4.6
4.6
3.6
1.0
20.8
5.0
1.9
3.1
5.1
10.7
40.4
15.7
1.0
14.6
3.6
4.8
0.6
0.1
0.5
-4.1
4.1
3.1
1.0
20.9
5.1
1.9
3.2
5.1
10.7
40.3
15.7
1.1
14.6
3.6
4.7
0.6
0.1
0.5
-3.8
3.8
2.8
1.0
20.9
5.2
1.9
3.3
5.0
10.7
40.1
15.7
1.1
14.6
3.6
4.5
0.5
0.1
0.5
-3.6
3.6
2.6
1.0
21.0
5.3
1.9
3.4
5.0
10.7
40.0
15.7
1.1
14.6
3.6
4.4
0.5
0.1
0.5
-3.4
3.4
2.4
1.0
21.0
5.3
1.9
3.4
5.0
10.7
39.9
15.7
1.1
14.6
3.6
4.3
0.5
0.1
0.4
-3.3
3.3
2.3
1.0
21.1
5.4
1.9
3.5
5.0
10.7
39.8
15.7
1.1
14.6
3.6
4.2
0.5
0.1
0.4
-3.1
3.1
2.1
1.0
21.1
5.4
1.9
3.5
5.0
10.7
39.7
15.7
1.1
14.6
3.6
4.1
0.5
0.1
0.4
-3.0
3.0
2.0
1.0
21.1
5.4
1.9
3.5
5.0
10.7
39.6
15.7
1.1
14.6
3.6
4.0
0.5
0.1
0.4
-2.9
2.9
1.9
1.0
21.1
5.4
1.9
3.5
5.1
10.7
39.5
15.8
1.1
14.6
3.6
4.0
0.5
0.1
0.4
-2.8
2.8
1.8
1.0
21.2
5.4
1.9
3.5
5.1
10.7
39.5
15.8
1.1
14.6
3.6
3.9
0.5
0.1
0.4
-2.7
2.7
1.7
1.0

-2.9
0.7
15.2
3.3
3.6
-0.6
3.6
3.7
-0.7
3.7
3.7
-0.7
3.7
3.7
-0.7
3.5
3.5
-0.5
3.2
3.2
-0.2
2.9
2.9
0.1
2.6
2.7
0.3
2.4
2.5
0.5
2.2
2.3
0.7
2.0
2.2
0.8
Memorandum items
2.3
-1.5
-0.4
10.0
-4.9
8.2
61.6
12.7
17.7
37.4
10.7
34.2
50.3
48.2
7.9
65.1
3.8
45.5
18.3
0.6
5.1
0.6
9.6
0.7
7.9
60.0
13.0
17.7
37.4
10.7
34.2
51.4
49.6
8.1
62.2
3.6
42.1
19.2
1.8
2.9
1.9
9.5
1.9
7.6
61.2
11.9
17.7
37.4
10.7
34.2
51.3
45.1
8.3
60.1
3.4
41.7
19.8
2.4
3.2
2.5
9.4
2.5
7.2
60.6
11.6
17.7
37.4
10.7
34.2
51.1
43.7
8.6
57.8
3.3
41.5
20.4
2.6
3.3
2.8
9.4
2.8
6.9
60.3
11.3
17.7
37.4
10.7
34.2
51.0
42.5
8.8
55.6
3.2
41.3
21.0
2.6
3.0
2.8
9.4
2.8
6.6
60.1
11.0
17.7
37.4
10.7
34.2
50.9
41.3
9.0
53.5
3.0
41.2
21.5
2.5
2.7
2.7
9.4
2.6
6.4
59.7
10.8
17.7
37.4
10.7
34.2
50.7
40.3
9.2
51.8
2.9
41.1
22.0
2.4
2.5
2.4
9.4
2.4
6.1
59.3
10.6
17.7
37.4
10.7
34.2
50.6
39.4
9.5
50.2
2.9
41.1
22.5
2.2
2.2
2.2
9.4
2.1
5.9
59.0
10.4
17.7
37.4
10.7
34.2
50.6
38.6
9.8
48.9
2.8
41.2
22.9
2.0
1.9
1.9
9.4
1.9
5.7
58.6
10.2
17.7
37.4
10.7
34.2
50.5
37.8
10.1
47.8
2.7
41.2
23.3
1.8
1.7
1.7
9.4
1.7
5.5
58.2
10.0
17.7
37.4
10.7
34.2
50.5
37.1
10.4
46.7
2.6
41.3
23.6
1.6
1.5
1.5
9.3
1.4
5.3
57.9
9.8
17.7
37.4
10.7
34.2
50.4
36.4
10.7
45.8
2.6
41.5
23.9
95
TABLE 10 SHOCK 4 (Aid shock with partially efficient IG)

Table 10
Niger: 5 Percent Increase in Aid to GDP Ratio, 2005-15, Lower Efficiency of Public Investment
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Total consumption
Private consumption
Total investment
Private investment
Public investment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.50
3.72
2.77
7.02
4.60
3.96
7.99
31.66
3.34
74.08
0.84
6.63
6.92
5.61
9.66
7.85
7.32
10.65
34.59
7.32
77.64
0.72
9.87
10.24
8.55
12.83
11.37
10.79
14.45
39.77
11.10
83.80
1.07
13.23
13.70
11.58
16.09
14.98
14.36
18.24
44.67
14.88
89.98
1.66
16.73
17.30
14.72
19.50
18.70
18.05
22.12
49.87
18.82
96.56
2.51
20.32
20.99
17.95
22.98
22.49
21.81
26.04
55.18
22.76
103.25
3.49
23.93
24.70
21.22
26.47
26.27
25.57
29.92
60.53
26.63
110.02
4.53
27.54
28.40
24.48
29.92
30.01
29.30
33.73
65.94
30.40
117.00
5.52
31.08
32.04
27.72
33.32
33.68
32.96
37.45
71.28
34.04
123.99
6.63
34.52
35.55
30.89
36.59
37.22
36.50
41.03
76.51
37.53
130.88
7.72
37.82
38.93
33.96
39.72
40.61
39.89
44.44
81.63
40.89
137.72
8.79

Disposable income
0.00
0.00
8.18
3.67
10.72
6.81
13.92
10.10
17.26
13.55
20.76
17.14
24.33
20.82
27.89
24.51
31.36
28.15
34.80
31.76
38.10
35.25
41.24
38.60
Poverty rate
0.00
0.00
0.00
0.00
-0.69
-0.30
-0.61
-0.93
-1.20
-0.52
-1.06
-1.61
-1.80
-0.79
-1.59
-2.39
-2.47
-1.11
-2.20
-3.25
-3.21
-1.47
-2.86
-4.16
-3.97
-1.86
-3.56
-5.09
-4.72
-2.26
-4.25
-5.98
-5.45
-2.66
-4.92
-6.83
-6.15
-3.05
-5.57
-7.62
-6.80
-3.42
-6.18
-8.36
-7.42
-3.79
-6.76
-9.04

Current account
Trade balance
Income (net)
Public
Private
Aid, total
Capital account
Private borrowing
Public borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5.57
0.09
-1.01
-1.10
-0.05
0.03
0.04
-0.01
5.00
0.49
-1.46
0.00
-1.46
0.00
5.19
-0.39
-1.37
-0.99
-0.06
0.05
0.06
-0.01
5.00
0.58
-1.74
0.00
-1.74
0.00
4.92
-0.73
-1.73
-1.00
-0.07
0.07
0.08
-0.01
4.99
0.66
-1.67
0.00
-1.67
0.00
4.70
-1.02
-2.04
-1.02
-0.08
0.09
0.10
-0.02
5.00
0.72
-1.65
0.00
-1.65
0.00
4.52
-1.26
-2.31
-1.04
-0.09
0.10
0.12
-0.02
5.00
0.76
-1.63
0.00
-1.63
0.00
4.34
-1.48
-2.55
-1.07
-0.09
0.12
0.13
-0.02
5.00
0.80
-1.63
0.00
-1.63
0.00
4.16
-1.68
-2.77
-1.09
-0.10
0.13
0.15
-0.02
5.00
0.82
-1.63
0.00
-1.63
0.00
3.99
-1.88
-2.98
-1.10
-0.10
0.14
0.16
-0.02
5.01
0.83
-1.63
0.00
-1.63
0.00
3.81
-2.07
-3.17
-1.10
-0.11
0.15
0.17
-0.02
5.01
0.83
-1.63
0.00
-1.63
0.00
3.63
-2.25
-3.35
-1.10
-0.11
0.16
0.18
-0.02
5.01
0.83
-1.64
0.00
-1.64
0.00
3.46
-2.42
-3.51
-1.09
-0.11
0.16
0.19
-0.02
5.01
0.82
-1.64
0.00
-1.64
0.00

Domestic taxes
Direct taxes
Indirect taxes
Total expenditure
Wages and salaries
Investment
Interest payments
Domestic debt
Foreign debt
Total financing
Foreign financing
Domestic borrowing
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4.49
-0.25
-0.08
-0.17
-0.26
5.00
2.91
-0.05
-0.05
0.00
-0.17
3.22
-0.04
0.00
-0.04
1.46
-1.46
-1.46
0.00
4.43
-0.34
-0.07
-0.27
-0.24
5.00
2.58
-0.05
-0.05
0.00
-0.17
2.91
-0.07
-0.01
-0.06
1.74
-1.74
-1.74
0.00
4.35
-0.40
-0.06
-0.34
-0.24
4.99
2.64
0.02
0.02
0.00
-0.17
2.86
-0.09
-0.01
-0.08
1.67
-1.67
-1.67
0.00
4.31
-0.44
-0.06
-0.38
-0.24
5.00
2.67
0.07
0.07
0.00
-0.17
2.81
-0.11
-0.01
-0.10
1.65
-1.65
-1.65
0.00
4.27
-0.47
-0.06
-0.41
-0.25
5.00
2.70
0.11
0.11
0.00
-0.17
2.77
-0.13
-0.01
-0.12
1.63
-1.63
-1.63
0.00
4.25
-0.49
-0.05
-0.43
-0.26
5.00
2.71
0.15
0.15
0.00
-0.17
2.73
-0.14
-0.01
-0.13
1.63
-1.63
-1.63
0.00
4.24
-0.50
-0.05
-0.45
-0.26
5.00
2.73
0.18
0.18
0.00
-0.17
2.70
-0.16
-0.01
-0.15
1.63
-1.63
-1.63
0.00
4.24
-0.50
-0.05
-0.45
-0.26
5.01
2.77
0.21
0.21
0.00
-0.17
2.68
-0.17
-0.01
-0.16
1.63
-1.63
-1.63
0.00
4.24
-0.50
-0.04
-0.46
-0.26
5.01
2.79
0.23
0.23
0.00
-0.17
2.67
-0.18
-0.01
-0.17
1.63
-1.63
-1.63
0.00
4.25
-0.50
-0.04
-0.46
-0.26
5.01
2.81
0.26
0.26
0.00
-0.17
2.66
-0.19
-0.01
-0.18
1.64
-1.64
-1.64
0.00
4.26
-0.49
-0.04
-0.46
-0.26
5.01
2.84
0.28
0.28
0.00
-0.17
2.65
-0.20
-0.01
-0.19
1.64
-1.64
-1.64
0.00

0.00
0.00
0.00
3.84
2.97
-2.97
3.20
2.50
-2.50
2.98
2.36
-2.36
2.74
2.19
-2.19
2.52
2.03
-2.03
2.31
1.86
-1.86
2.09
1.70
-1.70
1.90
1.54
-1.54
1.70
1.39
-1.39
1.51
1.23
-1.23
1.33
1.08
-1.08
Memorandum items
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
6.18
0.97
-0.40
0.92
-0.35
-12.90
6.51
0.00
0.00
0.00
0.00
10.69
4.73
-0.53
-5.85
-0.03
-2.37
0.00
0.00
0.08
0.80
-0.34
0.71
-0.23
-12.40
6.05
0.00
0.00
0.00
0.00
10.83
4.15
-0.64
-8.24
-0.10
-2.60
0.00
0.24
0.83
1.01
-0.32
0.89
-0.18
-12.42
5.95
0.00
0.00
0.00
0.00
10.97
4.33
-0.78
-10.46
-0.20
-2.96
0.10
0.51
1.05
1.25
-0.30
1.07
-0.14
-12.42
5.86
0.00
0.00
0.00
0.00
11.09
4.39
-0.91
-12.36
-0.29
-3.30
0.27
0.75
1.24
1.43
-0.28
1.24
-0.11
-12.44
5.78
0.00
0.00
0.00
0.00
11.18
4.48
-1.03
-14.02
-0.38
-3.60
0.49
0.94
1.37
1.56
-0.26
1.36
-0.08
-12.48
5.72
0.00
0.00
0.00
0.00
11.23
4.57
-1.16
-15.50
-0.47
-3.88
0.75
1.07
1.42
1.63
-0.25
1.43
-0.06
-12.53
5.67
0.00
0.00
0.00
0.00
11.27
4.66
-1.27
-16.82
-0.55
-4.12
1.04
1.16
1.39
1.62
-0.23
1.47
-0.04
-12.63
5.64
0.00
0.00
0.00
0.00
11.29
4.79
-1.37
-17.99
-0.62
-4.34
1.34
1.21
1.43
1.65
-0.21
1.48
-0.03
-12.74
5.62
0.00
0.00
0.00
0.00
11.30
4.94
-1.47
-19.06
-0.70
-4.54
1.66
1.23
1.40
1.61
-0.19
1.46
-0.02
-12.86
5.61
0.00
0.00
0.00
0.00
11.29
5.10
-1.56
-20.03
-0.77
-4.71
1.99
1.23
1.36
1.57
-0.17
1.42
-0.01
-12.99
5.61
0.00
0.00
0.00
0.00
11.27
5.28
-1.65
-20.91
-0.83
-4.86
2.32
96
APPENDIX H CALCULATION OF VARIABLES AND PROJECTION

OF EXOGENOUS VARIABLES
ENDOGENOUS VARIABLES
*** = calibrated series
AID
Total aid. The series are named as Official Development Assistance, Grants
total (from all donors) in the Development Assistance Committee database. It
includes both food aid (relief food aid and food aid excluding relief food aid)
and nonfood aid.
Unit: in current LCU
File: "Niger-AID-OECD.xls"; "Sheet: AID-TRANS"; "line 4", (Aid)
Note: The original series are multiplied by ER to express in current LCU.
Source: OECD.
***CP Total private consumption in real terms

Unit: in constant LCU (2004)
From: Equation (A19)
CP = Qd IP IG CG
***DdebtG Domestic public debt stock
DdebtG(t) = DdebtG(t+1) - DB(t+1)
Note: In 2003, actual value of DdebtG is taken, which is 0.0773 of NGDP. In
2004, DdebtG in 2004 = DdebtG in 2003 + DB in 2004.
***delta_LE_N
Total educated labor flow
Delta_LE_N = LE LE(-1)
Delta_NFA Change in reserves
Unit: in US$
File: Niger-BOP.xls, line 32, = overall balance
Note: The original series are divided by ER to convert into $US.
Source: IMF.
DITAX
Direct tax revenue (domestic)

File: [Niger-BUDGET.xls, line61]
Note: Total tax revenue is taken from the budget file. The share of direct tax
revenue in total tax revenue is calculated using data from World Bank sources.
(Niger-Wbafrican.xls; line=124; Direct taxes (Cur. Loc. Curr.))
Definition of Direct tax revenue in WB Africa Database: Direct taxes on
goods and services include all taxes and duties levied on production,
extraction, sale, transfer, leasing, or delivery of goods
and rendering of
97
services, or in respect of the use of goods, or permission to use goods or to

perform activities, are covered. Examples include all general sales taxes,
value added taxes and excises.
Source: IMF and World Bank.
***DITXR
Effective direct tax rate
DITXR = DITAX/YTOT
***DOM
Domestic sales
DOM = [PQ.Q-PM.M]/PD.
FG
Flow of government borrowing abroad

Unit: in US $
File: "Niger-AID-OECD.xls";"Sheet: AID-TRANS"; "line 6", (Loans Total Net)
Note: Since the original series are in millions of US dollars, we multiply them
by 1,000,000.
Source: OECD.
***FdebtG Stock of foreign debt

Unit: in US$
FdebtG(t) = FG(t) + FdebtG(t-1)
Note: 2004 value is the actual value.
***FdebtP Stock of private foreign debt
Unit: in US$
Note: FdebtP in 2002 = [Total external interest payment in $US from BOP in
2004]/RP* in 2003 and 2004. Then FdebtP in 2004 = FP in 2004 + FdebtP in
2002. FdebtP for t < 2002 is calibrated as follows: FdebtP(t) = FdebtP(t+1) FP(t+1).
***FdebtTot Total external debt
Unit: in US$
FdebtTot = FdebtP + FdebtG
GBAL
Government budget balance

File: "Niger-BUDGET.xls";"Sheet: Summary for model Final"; "line 29"; Overall
balance including grants
Source: IMF.
GTOT
Total government expenditure

98
File: "Niger-BUDGET.xls";"Sheet: Summary for model Final"; "line 15"

Source: IMF.
IG
Real public spending on investment

From: IG = Public FCF/PQT
File: "PUBLIC INVESTMENT STRUCTURE_ NIGER (1967-2002).xls"
Note: In 2003 and 2004, IG is calculated by multiplying total capital
expenditure (from Niger-Budget) in 2004 by the share of IG in total capital
expenditure (from Niger-Budget) in 2002.
Source: IMF.
IGedu
Real public investment in education

From IGedu = Public FCF in Education/PQT
Source: IMF.
IGhea
Real public investment in health

From: IGhea = Public FCF in health/PQT
Source: IMF.
IGinf
Real public investment in infrastructure

From: IGinf = Public FCF in infrastructure /PQT
Source: IMF.
IGoth Real public investment in others

From: IGoth = Public FCF in others /PQT
Source: IMF.
INDTAX
Indirect tax revenue (domestic)
Note: Total tax revenue is taken from the budget file. The share of indirect
tax revenue in total tax revenue is calculated using data from World Bank
sources. Total indirect tax revenue = Indirect [Niger-Wbafrican.xls;line=543;
Indirect taxes (Cur. Loc. Curr.)] [Niger-Wbafrican.xls; line=1014,Taxes on
int'l trade (Cur. Loc. Curr.)]
Definition of Indirect taxes in WB Africa Database: Indirect taxes are the
sum of indirect taxes less subsidies. Indirect taxes are those taxes payable by
producers that relate to the production, sale, purchase or use of the goods and
services. Subsidies are grants on the current account made by general
government to private enterprises and unincorporated public enterprises. The
99
grants may take the form of payments to ensure a guaranteed price or to

enable maintenance of prices of goods and services below costs of
production, and other forms of assistance to producers.
Note: This definition includes taxes on international trade. Since our definition
includes only domestic indirect taxes, taxes on international trade is
subtracted.
Source: IMF and World Bank.
***INDTXR Effective indirect tax rate
INDTXR = INDTAX/(Q.PQ)
IP
Real private spending on investment

File: "Niger-WBafrican.xls";"line=373; GDFI-priv
From: IP = Private FCF/PQT
Source: World Bank.
***J
Composite input from the supply of composite input T and private capital, KP
From: Equation (A2)
J(T, KP) = AJ[JT-J + (1 - J)KP-J]-1/J
***KGedu Stock of public capital in education

KGedu(t) = (1-deltaedu).KGedu(t-1)+IGedu(t-1)
***KGhea
Public capital in health
From: From: Equation (A33)
KGhea(t) = (1-deltahea).KGhea(t-1)+IGhea(t-1)
***KGinf
Public capital in infrastructure
KGinf(t) = (1-deltainf).KGinf(t-1)+IGinf(t-1)
***KGZ
From: Equation (A9)
KGZ(KGinf, KGedu) = AKGZ[KGZ{KGinf/(Y-1)KGI}-KGZ
+ (1 - KGZ){KGedu/(LR-1)KGE} -KGZ]-1/KGZ,
***KP Private capital
100
KP(t) = (1-deltaP).KP(t-1)+IP(t-1)
LE
Educated labor level

File: "Niger-WDI-GDF-all.xls";"line=475", (Literacy rate, adult total (% of
people ages 15 and above))
Note: Its value in 2004 is calibrated by multiplying LE in 2002 by 0.035 (n).
From: LE = POP*(literacy rate)
Source: World Bank.
***LE_P
Quantity of educated labor used in private production
LE_P = LE - LE_G
***LR Raw labor
From: = POP - LE
M
Demand for imported goods

File: "Niger-BOP.xls"; Line 10 + Line 14
From: M = Nominal imports.(1+tm)/(PM)
Source: IMF.
NGDP
GDP at market prices

File: "Niger-WBafrican.xls";"line=390"
Note:
The
2003
value
is
taken
from
the
file
named
[IMFMACROFRAMPETERLASTJUNE23.xls]; Sheet = Selected ind -TAb 4;
line = 75]. The 2004 value is taken from the file named
[IMFMACROPRGF2.xls].
Source: World Bank.
POP Size of the population

File: "Niger-WDI-GDF-all.xls"; line=645
Note: 2003 value = POP in 2002 * (1+0.031). 0.031 sent by Emmanuel. 2004
value = 3.3 % sent by government authorities.
Source: World Bank.
PQ
Composite market price (or consumer price index)

Unit: 2004 = 1
File: consumer price index "Niger-WDI-GDF-all.xls"; line=107; consumer price
index
Note: The CPI level in 2003 is calculated by multiplying CPI in 2002 by the
CPI inflation rate in 2003, which is taken from File =
IMFMACROFRAMPETERLASTJUNE23.xls; Sheet = Selected ind -TAb 4;
Line 16. Similarly, the CPI level in 2004 is calculated by multiplying CPI in
2003 by the CPI inflation rate in 2004 given in the file named as
[IMFMACROPRGF2.xls]. Then the CPI series is re-indexed in a way that the
2004 value = 1.
101
Source: World Bank and IMF.

***PQT
After tax PQ
PQT = (1+INDTXR)PQ
***Qd Total demand for goods sold on the domestic market (which includes both
imports and domestically-produced goods)
From: Equation (A5) and (A21)
Qd= (PY.Y (i.e. nominal GDP at factor cost) PX.X (i.e. nominal exports from
BOP) + PM.M (i.e. nominal imports from BOP times (1+tm)))/PQ
***Q
Domestic sales
Q = Qd
***SP Private savings

SP = Ydisp.s
***T
Effective labor; composite input from the supply of educated labor, LE, and
the stock of public capital in health, Kghea
From: Equation (A1)
T = AT[betaT.LE^(-rhoT) + (1-betaT).(Kghea/(POP^thetaH))^(-rhoT)]^(-1/rhoT)
TAX
Total tax revenue

File: [Niger-BUDGET.xls]Summary for model Final'!line=9
From: TAX = Tax revenue + non-tax revenue
Source: IMF.
Exports (in real terms)

File: "Niger-BOP.xls"; line= (9 + 13)
From: Exports in real terms = Nominal exports/PX
Source: IMF.
Aggregate supply of domestic goods (in real terms)

File: "Niger-WBafrican.xls";"line=385"; GDP at factor cost
Note: The original series is in constant 1987 LCU. In order to change the base
year to 2004, the Y series is re-indexed. It is calculated by dividing real GDP at
102
factor cost in 1987 prices by the ratio of real GDP at factor cost in 1987 prices
to nominal GDP at factor cost in 1987 prices in 2004.
Source: World Bank.
***Ydisp
Households disposable income in nominal terms
Ydisp = YTOT-DITAX
***YTOT
Total income before taxes
YTOT = PYY + WGLEG - RP*ERFdebtP-1 + RDDdebtG-1 + ERUTR$
***Z

Z(LEG, KGedu) = AZ[Z (.LEG)-Z + (1 - Z)(KGZ) -Z]-1/Z
103
EXOGENOUS VARIABLES
*** = calibrated series
AID$ Aid in foreign-currency terms
Unit: in US$
File: "Niger-AID-OECD.xls";"Sheet: AID-TRANS"; "line 9", (Food Aid) + "NigerAID-OECD.xls";"Sheet: AID-TRANS"; "line 10", (Non Food Aid)
Source: OECD.
CG
Real public spending on consumption

From: =(Total gov. expenditure-interest payment-public FCF-wages)/PQT
File: "Niger-BUDGET.xls";"Sheet: Summary for model Final"; "line 15"
(Expenditure - government), "Niger-BUDGET.xls";"Sheet: Summary for model
Final";
"line
18"
(Interest
Payments
government),"NigerBUDGET.xls";"Sheet: Summary for model Final"; "line 21" (Public FCF)
Source: IMF.
DB
Flow of direct domestic borrowing

File: "Niger-BUDGET.xls";"Summary for model Final"; "line 34"
Source: IMF.
ER
Nominal exchange rate

Unit: LCU per US$
File: "Niger-WDI-GDF-all.xls";"line=573); Official exchange rate (LCU per
US$, period average)
Note: In 2003 and 2004, ER is taken from File = Niger-IFS-all.xls; Line = 12.
ERROR_OMM
Unit: in US$
From: = capital account balance (incl. errors and omissions) - (FP+FG)
File: Niger-BOP.xls; Line = 27
Source: IMF.
FP
Private capital inflows

Unit: in US $
File: Between 1975-95, Foreign direct investment, net (BoP, current US$),
"Niger-WDI-GDF-all.xls", Line = 242. Between 1996-2002, Foreign direct
invest. (Net, cur. US $), "Niger-WBafrican.xls"; Line = 359
Note: In 2003 and 2004, the source of FP is File = Niger-BOP.xls; Line = 28.
This data point is divided by ER to convert it into $US.
Source: World Bank.
***Kappa_edu
Share of public investment in education
104
Kappa_edu = IGedu/IG
***Kappa-hea
Share of public investment in health
Kappa_hea = IGhea/IG
***Kappa-inf Share of public investment in infrastructure
Kappa_inf = IGinf/IG
***Kappa-oth
Share of public investment in other
Kappa_oth = IGoth/IG
***LAND
Land (normalized to unity)
LE_G Quantity of educated labor employed by the public sector

File: Effectifs Fonction Publique (SKILLED UNSKILLED).xls; Line = 21
Source: Government Authorities.
***n
Growth rate of population and raw labor

From: n = (POP-POP(-1))/POP(-1)
Note: In 2003, n is taken as 3.1%. In 2004, n is taken as 3.3%.
***RD Interest rate on domestic public debt

From: = [Total domestic interest payment = RD.DdebtG(t)]/DdebtG(t-1)
File: "Niger-BUDGET.xls";"Summary for model Final"; "line 54", RD.DdebtG-1,
Public interest payment, domestic, in billions of LCU
Source: IMF.
***RG*
Interest rate on public foreign debt
From: = [Total external interest payment in $US = RG*.FdebtG(t)]/FdebtG(t1)]
File: "Niger-BUDGET.xls"; Sheet = "Summary for model Final"; Line = 53;
RG*.FdebtG-1, Public interest payment, external, in billions of LCU
Source: IMF.
***RP*
Interest rate on private foreign borrowing

From: In 2004, its value is assumed to be equal to 0.021, the money market
rate in the Euro Area (assuming expected depreciation is zero and there is no
capital control in Niger). This value of RP* is used to calibrate total private
foreign debt stock in 2003 such that FdebtP in 2003 = [Total external interest
payment in $US]/RP* in 2003. Then other values of FdebtP are calibrated.
Then using this information, RP* before 2004 is calibrated such that RP*(t) =
[Total external interest payment in $US in period t]/FdebtP(t-1) where t = 1998
and 2002.
105
File: The data source of Total external interest payment is File = "NigerBOP.xls"; Line 16 + Line 17; Income (net) + Of which: gross official interest
payments.
Source: IMF.
tm
Tariff rate
From: = tax revenue from international trade (current LCU)/total
imports(current LCU)
Note: Total tax revenue is taken from the budget file. The share of
international tax revenue in total tax revenue is calculated using data from
World Bank sources. The data source of Taxes on international trade is File =
"Niger-Wbafrican.xls"; Line = 1014; Taxes on int'l trade (Cur. Loc. Curr.).
Definition of taxes on international trade in WB Africa Database: Taxes
on international trade include import duties, export duties, profits of export or
import monopolies, exchange profits, and exchange taxes. Current revenue
includes all revenue from taxes and nonrepayable receipts (other than grants)
from the sale of land, intangible assets, government stocks, or fixed capital
assets, or from capital transfers from nongovernmental sources. It also
includes fines, fees, recoveries, inheritance taxes, and nonrecurrent levies on
capital.
UTR$ Private unrequited transfers

Unit: in US$
File: Niger-BOP.xls, line 19 (Private transfers, net)
Note: The original series is divided by ER to convert it into $US.
Source: IMF.
WG
Average effective wage in the public sector

From: = total wage bill/LE_G
File: Niger-BUDGET.xls, line 49, wages and salaries.
Source: IMF.
Share of teachers in total educated labor in the public sector

From: = total number of teachers/LE_G
106
PRICES
Given share parameters, elasticity of substitution parameters, shift parameters,
and PQ = 1 in the base year, other prices are calibrated as follows:
PM
Domestic-currency price of imports (index)
From equation (A22) and given

M = Nominal M (from BOP series).(1+tm)/PM;
DOM = Nominal DOM/PD where Nominal DOM = PD.DOM = PQ.Q PM.M;
PD = {[PQ1-DM (1 - DM)PM1-DM]/ DM}1/(1-DM);
PQ = 1 in the base year;
DM = 0.75;
DM = 0.7;
PM = {[PQ1-DM.(NM/NDOM).(1/DM).((1- DM)/ DM)-DM]/ [1 +
(NM/NDOM).((1- DM)/DM).((1- DM)/ DM)-DM]}1/(1-DM)
where NM is nominal imports and NDOM is nominal domestic sales.
PD
Price of the domestic good (index)

From equation (A43); given the value of PM calculated above.
PD = {[PQ1-DM (1 - DM)PM1-DM]/ DM}1/(1-DM)
PX
Domestic-currency price of exports (index)
From equation (A6) and given

X = Nominal X (from BOP series)/PX;
DOM = Nominal DOM/PD where Nominal DOM = PD.DOM = PQ.Q (nominal
Q) PM.M (nominal M);
the value of PD calculated above;
DE = 0.15;
DE = 0.3;
PX = [PD1+DE.(NX/NDOM).((1- DE)/DE)-DE]1/(1+DE)
where NX is nominal exports and NDOM is nominal domestic sales.
PY
Price of Y
107
From equation (A42) and given the values of PX and PD calculated above
PY = [DE PX1+DE + (1 - DE) PD1+DE] 1/(1+DE).
PM*
World price of imports

From equation (A45) and given the value of PM calculated above
PM* = PM/(ER.(1+tm)).
PX*
World price of exports

From equation (A44) and given the value of PX calculated above
PX* = PX/ER.
108
PARAMETERS
DM = 1/(1+DM); elasticity of transformation between imports and demand for
domestic goods; =coefficient from regression = 0.7
DM Substitution parameter in Q; calculated with DM; = 0.43
KGE Parameter capturing congestion effects in the education system; =0.9
KGI Parameter capturing congestion effects in the education system; =0.9
H
Parameter determining the strength of congestion effects in the provision of

health services; =0.4
Parameter capturing congestion effects on infrastructure capital; = 0.3
ADE Shift parameter in production of domestic goods Ys; calibrated

ADM shift parameter in production of Qs; calibrated
AE
Shift parameter in flow production of educated labor LE; calibrated
AJ
Shift parameter for composite input J; =1
AKGZ Shift parameter for composite input KGZ; =1

AT
Shift parameter for composite input T; =1
AY
Shift parameter for composite input Ys; calibrated
AZ
Shift parameter for composite input Z; =1
DE
Share parameter between exports EXP and domestic sales DOM in

production of domestic goods Ys; calibrated = X/(X+DOM); =0.15
DM Share parameter between imports M and demand for domestic goods DOM;
calibrated = DOM/(M+DOM); =0.75
E
Share parameter between educated labor LE and public capital in education,

KGedu in flow production of LE; = 0.3
Share parameter between the supply of T and the stock of private capital, KP
in production of J; imposed; = 0.6
KGZ Share parameter between KGedu and KGinf in production of KGZ; calibrated;
= KGinf/(KGinf+KGedu); 0.79
109
Share parameter between the supply of educated labor, LE, and the stock of
public capital in health, KGhea in production of T; imposed; = 0.85
Share parameter between the supply of J and public capital in infrastructure,

KGinf in production of Y; imposed; = 0.85
Share parameter in equation Z; = 0.5
DE Transformation parameter in production of domestic goods Y; =4.333333333

E
Substitution parameter in flow production of LE; =2.333333333
Substitution parameter in production of J; =2.333333333
KGZ Substitution parameter in production of KGZ; =2.333333333

T
Substitution parameter in production of T; =2.333333333
Substitution parameter in production of Y; =
1.5
Substitution parameter in production of Z; =
DE = 1/(1-DE); elasticity of transformation between exports and domestic sales;

=0.3
E
= 1/(1+Y); elasticity of substitution between LR-1 and Kgedu in change LE; =

0.3
= 1/(1+J); elasticity of substitution between T and KP; =0.3
KGZ = 1/(1+KGZ); elasticity of substitution between KGinf and KGedu; =0.3

T
= 1/(1+T); elasticity of substitution between LE and Kghea/POPqH; =0.3
= 1/(1+Y); elasticity of substitution between J and KGinf; =0.4
= 1/(1+Z); elasticity of substitution in Z; =0.2
Depreciation rate of public capital with h = edu, hea, inf, oth; = 0.035
Constant rate of depreciation; = 0.06
Saving rate; imposed; = 0.1
110
ORDER OF CALIBRATION FOR CALIBRATED SERIES

Step 1: All the following variables can be determined individually right after assigning
the values of the actual variables.
DebtG, delta_LE_N, CP, FdebtG, FdebtP, FdebtTot, INDTXR, J, KGedu,
KGhea, KGinf, KGZ, KP, LE_P, LR, PQT, Qd, Q, T, Kappa_edu, Kappa_hea,
Kappa_inf, Kappa_oth, LAND, n, Z
Step 2: All the following variables are suggested to be determined by the order given
below.
1. PM
2. PD
3. PX
4. PY
5. PX*
6. PM*
7. YTOT
8. Ydisp
9. DITXR
10. SP
11. DOM
111
PROJECTIONS (2004-2015)
Kappa_edu = Kappa_edu in 2004
Kappa_hea = Kappa_hea in 2004
Kappa_inf = Kappa_inf in 2004
Kappa_oth = Kappa_oth in 2004
NMCG = Constant share of GDP (2004 value)
DB = 1 percent of NGDP
AID$ = Constant share of GDP (2004 value)
ER = ER in 2004
FP = Constant share of GDP (2004 value)
LAND = 1
n = 2004 value = 3.3%
PM* = PM*(t-1)*(1+0.03)
PX* = PX*(t-1)*(1+0.03)
RD = RD in 2004
RG* = RG* in 2004
RP* = RP* in 2004
tm = tm in 2004
UTR$ = POP* constant share of per capita UTR$ in 2004
ERROR_OMM = Constant share of GDP (2004 value)
LE_G = Constant share of LE in 2004
WG = WG(t-1)*[1+(Change in PQ/PQ(t-1)]
112
APPENDIX I MDG Tables

Table Baseline MDG Table
Table 2
Niger: MDG Indicators, Baseline Results for 2005-15
Projections
1990
Poverty rate (2003 = 63)
(% of the population living below $2 per day)
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
64.3
65.6
66.9
65.9
63.5
64.0
64.5
64.2
62.4
61.8
61.1
61.6
61.1
59.2
57.3
58.8
59.8
56.7
53.6
55.8
58.5
54.2
50.1
53.1
57.3
51.9
46.9
50.6
56.1
49.9
44.1
48.3
55.1
48.1
41.7
46.3
54.2
46.5
39.7
44.6
53.4
45.1
37.9
43.1
63.0 1/
Literacy rate
(% of educated labor in total population)
11.4
19.2
19.9
20.8
21.7
22.6
23.5
24.4
25.3
26.1
26.9
27.6
Infant mortality (2002=155)

(Infant mortality rate per 1000 live births)
191
156
153
149
144
139
135
131
127
124
121
119
Malnutrition (2000=40.1)
(Malnutrition prevalence, weight for age)
42.6 2/
41.1
41.1
40.7
40.2
39.6
39.1
38.5
38.0
37.6
37.2
36.8
Life expectancy (2002 = 46.2)

(Life expectancy at birth, years )
42.1
46.5
46.5
46.8
47.1
47.5
47.8
48.1
48.4
48.6
48.9
49.1
Access to safe water (2000=59)

(Percentage of population with access to safe water)
53.0
57.5
57.9
58.3
58.7
59.1
59.6
60.0
60.3
60.7
61.1
61.4
100.0
101.4
103.7
106.2
108.9
111.5
114.1
116.6
118.9
121.0
123.0
10.7
51.4
62.0
0.5
3.6
10.7
51.4
59.4
0.5
3.4
10.7
51.3
56.4
0.5
3.2
10.7
51.3
53.3
0.5
3.0
10.7
51.2
50.5
0.4
2.9
10.7
51.2
48.1
0.4
2.8
10.7
51.1
46.0
0.4
2.7
10.7
51.0
44.2
0.4
2.6
10.7
50.9
42.7
0.4
2.5
10.7
50.8
41.4
0.4
2.4
10.7
50.8
40.4
0.3
2.3
COMPOSITE MDG INDICATOR (2005 = 100)

(A rise denotes an improvement)
Aid and external debt indicators
Foreign aid (in % of GDP)
Aid (in % of total government revenue)
External debt (in % of GDP)
Interest payments on external public debt (in % of GDP)
Interest payments on external public debt (in % of exports)
Note: The adjusted elasticity formula proposed by Ravallion (2004) is -9.3*(1-Gini)^3 = -1.13 where Gini index is 50.5 for Niger.
Malnutrition prevalence is in % of children under 5.
1/ The observation year is 1993.
2/ The observation year is 1992.
113
Table 5 Percent Increase in the Aid to GDP Ratio

Table 3
Niger: 5 Percentage Point Increase in Aid-to-GDP Ratio, Simulation Results for 2006-15
(Absolute deviations from baseline)
Projections
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-0.3
-0.6
-0.9
-0.7
-0.5
-1.1
-1.6
-1.2
-0.9
-1.7
-2.5
-1.9
-1.3
-2.5
-3.6
-2.8
-1.8
-3.4
-4.8
-3.8
-2.4
-4.3
-5.9
-4.8
-2.9
-5.2
-6.9
-5.7
-3.5
-6.0
-7.7
-6.5
-4.0
-6.7
-8.4
-7.2
-4.4
-7.3
-9.0
-7.9
Literacy rate
0.0
0.0
0.2
0.5
0.9
1.4
2.0
2.5
3.1
3.7

-10
-10
-11
-12
-13
-14
-15
-16
-17
-17
-3.0
-2.8
-2.9
-3.1
-3.3
-3.6
-3.8
-4.1
-4.3
-4.6

1.6
1.5
1.6
1.7
1.8
2.0
2.1
2.3
2.4
2.6

0.4
0.4
0.4
0.5
0.6
0.8
0.9
1.0
1.2
1.3
COMPOSITE MDG INDICATOR

3.3
3.4
4.2
5.2
6.5
8.0
9.6
11.2
12.9
14.4
5.0
10.6
-5.6
0.0
0.0
5.0
10.8
-8.0
-0.1
-0.1
5.0
11.0
-10.1
-0.1
-0.2
5.0
11.2
-12.0
-0.1
-0.3
5.0
11.3
-13.6
-0.1
-0.4
5.0
11.4
-14.9
-0.1
-0.5
5.0
11.4
-16.0
-0.1
-0.6
5.0
11.4
-16.9
-0.1
-0.6
5.0
11.4
-17.7
-0.2
-0.7
5.0
11.4
-18.4
-0.2
-0.7


114
Table Cancellation of External Debt in 2006

Table 4
Niger: External Debt Cancellation in 2006, Simulation Results for 2006-15
(Absolute deviations from baseline)
Projections
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0.0
-0.1
-0.1
-0.1
-0.1
-0.1
-0.2
-0.1
-0.1
-0.2
-0.3
-0.2
-0.2
-0.3
-0.4
-0.3
-0.2
-0.4
-0.6
-0.5
-0.3
-0.5
-0.8
-0.6
-0.4
-0.7
-0.9
-0.7
-0.4
-0.8
-1.0
-0.8
-0.5
-0.9
-1.1
-0.9
-0.5
-0.9
-1.2
-1.0
Literacy rate
0.0
0.0
0.0
0.1
0.1
0.2
0.3
0.3
0.4
0.5

-2
-1
-1
-2
-2
-2
-2
-2
-2
-2
-0.4
-0.4
-0.4
-0.4
-0.4
-0.4
-0.4
-0.4
-0.5
-0.5

0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3

0.1
0.0
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1

0.5
0.5
0.5
0.6
0.8
0.9
1.1
1.3
1.4
1.6
0.0
0.1
-49.8
-0.5
-3.4
0.0
0.1
-44.5
-0.5
-3.0
0.0
0.1
-39.5
-0.4
-2.7
0.0
0.1
-35.2
-0.4
-2.4
0.0
0.1
-31.5
-0.3
-2.2
0.0
0.1
-28.3
-0.3
-2.0
0.0
0.1
-25.7
-0.3
-1.8
0.0
0.1
-23.4
-0.2
-1.6
0.0
0.1
-21.5
-0.2
-1.5
0.0
0.1
-19.8
-0.2
-1.4


115
Table 0.52 Percent Increase in the Aid to GDP Ratio

Table 3
Niger: Monitoring the MDGs, 2005-15 (5 Percent Increase in Aid to GDP Ratio, 2006-15)
(Absolute deviations from the baseline)
Projections
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0.0
0.0
0.0
0.0
0.0
-0.1
-0.1
-0.1
-0.1
-0.1
-0.2
-0.1
-0.1
-0.2
-0.3
-0.2
-0.2
-0.3
-0.4
-0.3
-0.2
-0.4
-0.6
-0.5
-0.3
-0.5
-0.7
-0.6
-0.4
-0.7
-0.9
-0.7
-0.4
-0.8
-1.0
-0.9
-0.5
-0.9
-1.1
-1.0
-0.6
-1.0
-1.3
-1.1
Literacy rate
0.0
0.0
0.0
0.0
0.1
0.1
0.2
0.2
0.3
0.4
0.5

-1
-1
-1
-2
-2
-2
-2
-2
-2
-2
0.0
-0.4
-0.4
-0.4
-0.4
-0.4
-0.4
-0.5
-0.5
-0.6
-0.6

0.0
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3
0.3
0.3

0.0
0.0
0.0
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.2

0.0
0.4
0.4
0.5
0.6
0.8
1.0
1.1
1.3
1.5
1.7
0.0
0.0
0.0
0.0
0.0
0.5
1.3
-0.6
0.0
0.0
0.5
1.3
-0.8
0.0
0.0
0.5
1.4
-1.0
0.0
0.0
0.5
1.4
-1.2
0.0
0.0
0.5
1.4
-1.4
0.0
0.0
0.5
1.4
-1.5
0.0
0.0
0.5
1.4
-1.6
0.0
0.0
0.5
1.4
-1.7
0.0
0.0
0.5
1.4
-1.8
0.0
0.0
0.5
1.4
-1.9
0.0
0.0


Note: The adjusted elasticity formula proposed by Ravallion (2004) is -9.3*(1-Gini)^3 = -1.13 where Gini index is 50.5 for Niger.
Malnutrition prevalence is in % of children under 5.
116
Figure 1 Simulation Program Setup
Step 1
Input File (Niger-Data.xls)

Exogenous variables
Endogenous variables
Step 2
EViews Simulation Program

(Niger-Simulation.prg)
Step 3
Step 4
Output File
(Niger-Output.xls)
Summary Table
(Niger-Output-Table.xls)
117
FIGURE 2 INPUT FILE: ENDOGENOUS VARIABLES
118
FIGURE 3 INPUT FILE: EXOGENOUS VARIABLES
119
FIGURE 4 THE OUTPUT FILE
120

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Operational Manual for

I. INTRODUCTION, BACKGROUND, and OBJECTIVES

Two software programs are required to run this simulation program:

(a) EViews Version 4 or higher2.

Four different files are used to simulate the model. .

OUTPUT-NIGER-SHOCK3C.xls presenting the Shock 3C output

II. INPUT DATA FILE

The location of the endogenous variables is on ENDO sheet, the exogenous

Base year and Simulation period

Estimation running regression equations;

Use of parameters provided in various studies as given; or,

Calibration within the model5.

1. Econometric Estimation of Some Parameters

The estimated equations are

PQTIG/NGDP = IG[(TAX/NGDP)-1, AID/NGDP, (AID/NGDP)2]

PQTIP/NGDP = IP((Y/Y-1) -2, PQT*KGINF/NGDP, ERFP/NGDP).

The definitions of variables and equations are given in Appendix B and E,

successively. The estimation results are reported in Appendix C. It should be noted

The regression results are:

Adjusted R = 0.742; Durbin-Watson statistic = 1.861

+ 0.033* ERFP/NGDP -0.028* Dummy87 -0.027*Dummy92_95

Adjusted R2 = 0.710; Durbin-Watson statistic = 1.893

scalar command is used. The general Eviews syntax is the following:

Example. The value of the parameter DE is introduced in the program as

Some of the parameters need to be calculated using the values of other

The elasticity of transformation in domestic production was set at 0.3, whereas

Parameters capturing congestion effects were difficult to estimate, given the

The savings rate is taken as 10 percent.

3. The Parameter Calibration Part of the Program

For example, output, Y, is defined as series using the following command:

parameter of the composite price level, PQ.

IV. EXOGENOUS VARIABLES PROJECTED WITHIN THE PROGRAM

The niger.append command is defined below.

ERROR_OMM is calculated as ERROR_OMM = ERRORGDP_const*(NGDP/ER).

V. CALCULATION OF RESIDUALS TO EQUATE ESTIMATED VARIABLES WITH

As mentioned earlier, some of the parameters are obtained running regression

variables, which is equal to 27,679,573,152 in LCU. The difference between the

The residual for INDTXR (INDTXR_RES = 0.005) is calculated by taking the

difference between the actual and estimated values of INDTXR in 2004:

Another residual is calculated for private investment, IP, using regression

variable in order to make identities hold in the base year.

historical CP series is calibrated as Qd CG IG IP. In the model, CP is supposed

A residual for NGDP is calculated as well. In the model, NGDP =

PQT*Qd+PX*X-PM*M +PMstar*tm*ER*M. In order to equate the right hand side of

VI. PARTIALLY ADJUSTED VARIABLES

where PD is a parameter measuring the speed of price adjustment towards its

VII. THE SIMULATION PROGRAM

Step 4: In this stage, the simulated variables stored in Niger-Output.xls will

must be emphasized related to programming in EViews.6 EViews can work with

Our EViews program is executed by double-clicking on the Niger-

simulation.prg file. It will be automatically launched and the simulation starts

A simple example model is presented in Appendix F.

3.1. The Basic Information about Running the Program in EViews

See the EViews Help Manual for details.

running a deterministic simulation model in EViews:

We use different EViews commands in the simulation program. These

Whenever one runs an EViews program, a workfile will be created, which

Here Niger-simulation is chosen as name of our workfile, which will be

accordingly. Options will be presented within the parenthesis.

We follow exactly the same procedure to import endogenous variables using

This command appears in our code as follows

Here we want to export variables for the period 3 to 17 corresponding to the

we start coding our equations. The general syntax:

PQTQd+PXX-PMM +PMstartmERM. In order to equate the right hand side of

INFANT MORTALITY RESIDUAL=LN(155) +0.0910.84+0.191LN(220)-0.011*63

LIFE EXPECTANCY RESIDUAL= LN(46.19)-0.048(0.84227)0.078LN(219.6256)+0.002*63

WATER RESIDUAL= =59-4.0767LN(8.48)-6.9219LN(212)-1.7024*1.712