Empirical Investigation into the Determinants of Public Debts in Africa: New Insights Using a Panel Bayesian Model Averaging Approach

Abstract The determinants of public indebtedness in developing countries is still generating a lot of interest among academics and policy makers. This paper introduces model uncertainty into the empirical study on the determinants of public debt at continental level. This is done by adopting a Bayesian model averaging approach applied to data of 51 African countries spanning from 1990 to 2018. Our results suggest that, among the set of twenty-seven (27) regressors considered in the baseline model, those reflecting international financial and institutional conditions as well as internal economic prospects tend to receive high posterior inclusion probabilities. These findings are robust to changes in the model specification, the inclusion of economic crises and geographical heterogeneities of the continent.