Foreign capital inflows, domestic savings and the price of political stability in the sudan: Weisskopf revisited

This paper reworks Weisskopf's estimates of the effect of foreign capital inflow on domestic savings for a later time period. The Sudan is presented as an example of a public sector dominated economy, dependent on one major export crop and politically unstable. While Weisskopf's savings function had an indication of a negative relationship between public sector savings and official foreign capital inflow, problems of collinearity between the independent variables cast doubt on its utility for analysis of economies dependent on limited primary exports. The negative relationship between public sector savings and official is explained in terms of the expansion of the state's bureaucracy and military.