The paper uses analytic narratives to determine the economic and political factors that have shaped Lesotho’s fiscal policy choice during both the colonial and post-colonial eras. This is essential given that fiscal policy is the linchpin for macroeconomic management in Lesotho, especially in the fixed exchange rate regime context. It is important to trace this evolution as far back as the colonial era since some researchers have argued that institutional divergences that took place during colonization had lasting implications on present-day institutions. The findings show a series of political and economic factors at the roots of the country’s underdevelopment from the colonial era to the end of the review period. The post-colonial elites further deepened the despotism traits of the colonists, and the era of coalition governments has exacerbated the fiscal position. 

 

Key words: Fiscal Policy, colonial era, post-colonial era, analytic narratives.