The relationship between the size of public sector and the rate of economic growth has been widely examined empirically in different countries. Most applied studies confirmed the validity of the inverse relationship between the increasing role of the state in the economy, measured by the ratio of public spending to gross domestic product and rates of economic growth. These studies estimated the optimum rate that would guarantee achieving the highest economic growth rates. This study aims to analyses this relationship for the case of the Jordanian economy. Using a theoretically justified econometric model, the researchers have utilized an ARDL econometric technique to quantitatively assess this relationship for the period (1970-2018). The study relied on official data related to the gross domestic product published by the Central Bank of Jordan and official data related to public spending and public revenues published by the Jordanian Ministry of Finance. The econometric results of the study confirm the existence of an inverse relationship between the size of public sector and the rate of economic growth in Jordan, which may lend support to the hypothesis of the Armey curve. The optimal size of the government (public sector) is estimated to be about 26 percent, which is much lower than the actual average government size in Jordan. The researchers recommend the need to gradually cutting down the size of public sector through adjusting the real spending structure and restructuring the independent public institutions. The restructuring of independent public institutions requires the abolition of institutions that are not economically feasible and constitute more financial burdens on society on the one hand, and the merging of a number of them into an independent public institution that provides its services to the community in an efficient and effective manner. Researchers also recommend the need to continue privatizing the public sector and activating the role of partnership between the public and private sectors. Keywords: size of public sector, government spending, economic growth, ARDL, privatization.
Declining economic growth in Jordan, rising unemployment and the abolition of state support for certain segments of the population have led to a deterioration in the welfare of the middle class in Jordanian society. The importance of the middle class for the country is due to the fact that they act as a driving force in creating a market economy, as well as implement creative and intellectual work. The article considers the essential importance of the middle class and its role in building a democratic and legal state, as well as in ensuring a stable pace of economic development. The purpose of this article is to analyze the level of decline in the middle class in Jordanian society during 2010-2017. The following indicators were used to conduct this study: average annual income, double the national poverty line and the share of the population that receive an average of 60% of income. The source of statistical information was the data of the World Bank and the General Statistics Department of Jordan. The author of the article proposes to calculate a generalized indicator for the characteristics of the middle class in society – the average annual household income index. The study showed that during 2010-2017 there was a significant reduction in the size of the middle class in Jordan. The author suggests that such negative dynamics will persist in the coming years, especially given the decline in economic activity due to the coronavirus pandemic. It is proved that the inefficiency of state economic and social policy has led to an increase in the number of poor people, as well as rising unemployment in the country. According to the results of the study, it is proposed to adjust government programs to ensure the preservation of the middle class and enable it to realize its potential in stimulating economic growth, human capital development and supporting the development of civil society in Jordan.
This study aims to determine the change in consumption patterns of the Jordanian household during 1997–2017, as well as to estimate the income elasticities. The data from the household expenditure and income surveys conducted by the Jordanian Department of Statistics in the years: 1997, 2006, 2008, 2010, 2013, and 2017 were used. Graphs were prepared and percentages were calculated to measure changes in household consumption patterns. The average household expenditure index was used to measure the impact of income on changing consumption patterns (Selim, 2014). To estimate income elasticity, a pooled data regression model was adopted (Sugiarto & Wibowo, 2020). The estimated model is statistically significant at a level of 0.05. The study found a decrease in the percentage of household spending on the food group and an increase in the percentage of spending on the non-food group during the study period. This change in the family’s consumption pattern coincided with an increase in its income. Value of income elasticity was < 1 for food, clothing, and housing. It was > 1 for transportation and communication, education, and health. Therefore, we conclude that the consumer behavior of the Jordanian family is fully consistent with the theory of consumer behavior and its applications.
This research aims to measure the regional disparities in Jordan’s economic growth during 2010-2017. As an indicator to measure the economic growth in each region is the regional factor (R) adopted, and for estimation the regional factor is the Shift and Share method used. This method is widely used by geographical economist. The annual average of household income, as economic indicator, to estimate the regional factor in this study will be adopted. Data on annual household income were taken from the expenditure and income surveys prepared by the Jordanian General Statistics Department in year 2010 and year 2017. The results of this study indicate that economic growth in Irbid region and Mafraq region was greater than the national growth, while the rest of the regions have had much slower economic growth compared to national growth during the study period. Expect Amman region, the capital of Jordan, showed similar economic growth to national level. The results of the research indicate that the region’s share of income increased for regions that achieved high economic growth and in return this share was reduced to the values that showed low growth and lower than the rate of national economic growth. The least economically developed regions are the regions in the south of the country, despite the development policies in the field of balanced regional development, but because of the lack of infrastructure, they are still unable to reduce the development gap between the regions in Jordan. The study recommended the need for the government to enable the regions to accelerate regional development as well as reduction in the development gap between them by devolving administrative and financial powers from the central level to the regional level. It also recommended the need to support investment, especially in the less developed regions. Keywords: economic growth, regional economics, income distribution, development planning, decentralization.
The study aims to evaluate Jordan’s experience in decentralization at the regional and local levels by heads and members of provincial councils, municipal councils and opinion leaders. This evaluation includes the three dimensions of decentralization (political, financial and administrative). For evaluation purposes, two questionnaires were designed. The first one for the governorates and the second one for the municipalities. The questionnaires were judged by academic experts and verified for credibility. The sample size was (578) and distributed as follows (141) at the governorate level, (370) at the municipality level, and the rest belong to opinion leaders in the communities. The statistical program SPSS was used to enter and analyze the data. The descriptive statistical method was used, represented by the arithmetic mean and standard deviation. The t-test was used to test the validity of the null hypotheses at a level of significance (0.05). The finding indicates that there is a moderate extent of the implementation of political, fiscal, and decentralization in Jordan at regional with a mean variable (3.13), (2.70), and (3.10), and with the estimated standard division was (1.10), (1.08), and (0.98) respectively. It indicates also a moderate extent of decentralization in all dimensions (political, fiscal, and administrative) at Municipality level with a mean variable (2.62), (2.98), and (2.84), and with the estimated standard division was (1.20), (1.026), and (1.037 ) respectively . The statistical tests for all the main and sub-hypotheses confirmed the acceptance of the null hypothesis, which means that the degree of decentralization in all its three dimensions (political, financial and administrative) is low in Jordan. The study recommended that decision-makers should review the experience and amend the laws governing decentralization in order to ensure more decentralization in its political, financial and administrative dimension.
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