PurposeThe purpose of this study is to investigate the effect of government expenditure on economic growth in 15 Economic Community of West African States (ECOWAS) countries over the period of 2005–2017. More precisely, this paper investigates whether institutional environment influences the effect of government spending on economic growth.Design/methodology/approachThis study adopts the generalized method of moments-system method of estimation to address the problem of dynamic endogeneity inherent in the relationship. Similarly, unlike previous studies which assume that the disturbances of a panel model are cross-sectionally independent, we account for cross-section dependency and cross-country heterogeneity inherent in empirical modeling using Driscoll and Kraay's nonparametric covariance matrix estimator, adjusted for use with both balanced and unbalanced panels along with Monte Carlo simulations.FindingsThe authors find that though, government spending has a positive impact on economic growth but the level of institutional quality adversely affect that positive impact. This suggests that the institutional environment in ECOWAS countries is a drag and not a push factor for government fiscal operations and/policies. Thus, the results provide empirical evidence that there is a conditional relationship between government spending and economic growth in African countries. That is, the effect of government spending on economic growth is dependent on the quality of institutions. Lastly, these findings suggest that in order for government spending to contribute to economic growth, African countries must develop a strong institutional environment.Originality/valueUnlike previous time series studies for African countries which concentrated on the two variable case, we include institutional quality as a third variable to underline the potential importance of institutional quality for economic growth in ECOWAS countries.
PurposeThis study explores the asymmetric linkage between public investment and private sector performance in Nigeria. This is due to the presence of nonlinear structures in the behavior of domestic investment series with evidences of structural time breaks, which fall within periods of global financial crises and oil shocks.Design/methodology/approachMain data on gross capital formation, gross fixed capital formation, domestic credit to private sector, domestic credit to private sector by banks are used for the study span through 1986 to 2017. Evidence of asymmetry spurs the study to adopt the nonlinear autoregressive distributed lag, asymmetric generalized impulse response and variance decomposition and asymmetric granger causality techniques.FindingsIt is shown that positive (negative) investment shocks exhibit a non-negligible and substantial stimulating (dampening) influence on the long-run performance of private sector in the economy. However, there is evidence that negative investment shocks portend a positive influence on the performance of private sector in the short run. This suggests that negative shocks to investment may not dampen the effectiveness of private sector in the short run, and this thus brings to bear the debate on the tenability of public investment as a potent counter cyclical tool in enhancing short-run private sector growth. The nonlinear granger causality also shows a unidirectional nonlinear causality from public investment to private sector performance. However, there is no evidence of bidirectional nonlinear causality.Originality/valueThis study provides quantitative evidence that Nigeria still depends exclusively on public investment, and as an oil-based rentier economy its economic diversification drive still remains bleak.
Purpose The purpose of this paper is to examine the direction of causality between government expenditure and economic growth in the Economic Community of West African States (ECOWAS) countries. Design/methodology/approach The study adopts the recently developed panel vector autoregressive (PVAR) by Love and Abrrigo (2015) and two-step system generalized method of moments (GMM) in order to resolve the inherent problems of endogeneity and persistence in economic data. Findings The results from the study show no evidence of either unidirectional or bidirectional causal relationship between government expenditure and economic growth in ECOWAS member countries. Originality/value Unlike previous studies that adopted cointegration technique, we adopt a system GMM through the application of a dynamic PVAR framework within the framework of panel data analysis in order to address the possibility of feedback effect in the causal relationship between government expenditure and economic growth. In addition the PVAR also allows us to model shocks across countries.
The exclusion of women in politics has been identified in recent times as one of the major setbacks for economic development. Women's groups are a strong pillar for grassroots politics; and a drive for more women participating in politics at the grassroots still faces a lot of challenges, making it difficult for them to harness available opportunities for economic development. Thus, the opportunity therein for more women's participation in politics and women empowerment is yet to be exploited by the women's groups in Nigeria. This present study assesses the role of women's groups in politics, identifies their challenges and also explores its implication for economic development in Osun state, Nigeria. The study was carried out using primary data from forums and dialogues within women's groups, consisting of an average of thirty (30) members from ten (10) local government areas (LGAs) in Osun state, Nigeria. In addition, explorative methods using existing literature were also employed. Findings from the study indicate that women's groups do not have political agenda; mostly, their goals do not align with any political agenda, although their members accept appointments, and also enjoy government patronage. There was also an indication that there exists a high illiteracy rate among the members of the women's groups and most of them are not aware of existing National or International gender equality laws or affirmative action. Thus, it is difficult to participate in politics and contribute their voices to political issues. The study concludes that the present role played by women's groups at the grassroots level may not be adequate in encouraging more women's participation in politics and in influencing economic development. Thus, there is need to step up their activities and embrace political issues if they are to help more women participate and be relevant in politics. The study therefore suggests that more empowerment programs, especially in the area of decision making and participation in politics, should be targeted at women's groups at the grassroots levels by the governments and all stakeholders as a matter of priority.
This paper investigates the relative importance of public debts and money growth on inflation in Nigeria from 1980 to 2015. Annual secondary data collected from World Development Indicators were used for the analysis. After examining the behaviour of the time series, Unrestricted Vector Autoregressive (VAR) technique of estimation is employed with a view to determining whether inflation is a monetary or fiscal phenomenon in Nigeria. The results show that, both in the short and long run, public debts accounts for a sizeable percentage in the variation of inflation rather than growth in monetary supply, making inflation a fiscal phenomenon in Nigeria. We therefore recommend that the attainment of fiscal solvency would be more effective in achieving price stability in Nigeria.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.