Financial repression and capital controls in Sudan : An evaluation of fiscal effects
Macroeconomic policies for inclusive development
- Sawsan Abdul-Jalil
The purpose of this paper is to evaluate the fiscal effects of capital controls on outflows in Sudan over the period 2000-2014. To determine whether capital controls liberalization will contribute to a loss of government revenue. The paper provides a novel estimation of the fiscal revenue of capital controls in via financial repression. The estimation is based on the difference between the domestic and foreign cost of borrowing. Interestingly, the reve- nue from capital controls is negative. The paper suggests that the main reason behind this result is the high yield on government bonds due to the critical need to mobilize domestic resources.