The African Financial Review July-August 2014 | Page 39

to the degree of democratization.

In the absence of institutional mechanisms that allow the
participation of various socio- economic actors in the development
of government policies and control mechanisms that allow these
actors to challenge the decisions taken by leaders, economic
policies will have a limited impact.

What is the purpose of fiscal reforms if the government force
continues to serve the interests of a particular socio-economic
group and where are the utility of a central bank, which seems
independent, but whose decisions are in reality established for
the purpose of populist decisions?

Macroeconomic stabilization policies such as measures of
removing subsidies on certain products or raising taxes, in order
to reduce budget deficit and increase government reserves or
increasing the key interest rate in order to reduce the money
supply, require strong decisions, which can only be implemented in
a context of democratic political environment. Democracy allows
to political and economic decision makers legitimacy, which is
necessary for any given macroeconomic policy.

References

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Alvarez, M., Cheibub, J.A, Limongi, F., Przeworski, A. (1999),
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upenn.edu/~cheibub/data/ACLP_codebook.pdf.
Arat, Z.F. (1991), Defining and Measuring Political Democracy
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Banque Centrale de Tunisie, www.bct.gov.tn/.

Berg, A., Sachs, J. (1988), The Debt Crisis: Structural Explanations
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Bollen, K A. (1990), Political Democracy: Conceptual and
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Coppedge, M., Reinecke, W.H. (1991), Measuring Polyarchy.
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Dahl, R.A. (1971), Polyarchy: Participation and Opposition. New
Haven, Conn: Yale University Press.

Desei, R.M, Olofsgard, A., Yousef, T. (2002), Democracy, inequality
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Dornsbusch, R., Edwards, S. (1990), The Macroeconomics of
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1972-73 to 1999-00. http://freedomhouse.org/ratings/index.htm.
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