Impact of Government Expenditure on Economic Growth in Nigeria, 1970-2019

Aluthge, Chandana; Jibir, Adamu; Abdu, Musa

doi:10.33429/cjas.12121.6/6

Cited by 25 publications

(31 citation statements)

References 66 publications

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“…A study [16] shows that increasing government expenditure accelerates economic growth in low-income countries in sub-Saharan Africa, which is in line with the result of the study. The findings of [14] revealed that capital expenditure has a positive and significant impact on economic growth both in the short run and the long run, while recurrent expenditure does not have a significant impact on economic growth both in the short run and the long run. According to [19; 20], it was demonstrated that capital spending had a positive and significant effect on economic growth in East Africa which consistent with study.…”

Section: Resultsmentioning

confidence: 96%

“…The findings of a panel data regression analysis conducted in eight districts/cities in Indonesia (Baten) from 2010 to 2017 reveal that government expenditure has a positive impact on economic growth [13]. The impact of government expenditure on economic growth in Nigeria from 1970 to 2019 was studied using an Autoregressive Distributed Lag (ARDL) model, and the study's findings revealed that government expenditure had a positive and significant influence on economic growth [14]. A research [15] examines how government spending influenced economic development in developed, developing, and underdeveloped nations from 1980 to 2012 using the unbalanced panel technique.…”

Section: Literature Reviewmentioning

confidence: 99%

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The connection between government expenditure and economic growth: Case study of four Eastern African countries

Gebreyesus¹

2021

Economics of Development

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The governments today are concerned not only with performing basic responsibilities but also with promoting the economic development of their respective countries. The aim of the study was to examine the connection between government expenditure and economic growth in Ethiopia, Kenya, Tanzania, and Rwanda to provide information for policymakers on fiscal policy issues. Panel (time-series cross-section) data over the period of 2011 to 2020 was used. A linear regression model was employed, and a descriptive analysis was carried out. The findings of the study revealed that the four countries’ economies grew at a fluctuating rate over the study period. Ethiopia had a substantially larger GDP and the lowest GDP per capita, while Kenya had the lowest GDP and the highest GDP per capita among the nations. Kenya’s GDP per capita was double that of Ethiopia’s and Tanzania’s at the end of the study period. In addition, the results of the regression mode show a positive but insignificant connection between government expenditure and economic growth in the four countries

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Section: Resultsmentioning

confidence: 96%

Section: Literature Reviewmentioning

confidence: 99%

The connection between government expenditure and economic growth: Case study of four Eastern African countries

Gebreyesus¹

2021

Economics of Development

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“…As for the Capital spending, though not all the studies show that it has growth-enhancing impact, recent literature has more evidence about this result, compared to the older literature (Romp, W. E. & Haan, J., 2005). Moreover, according to the estimation of the short and long-run dynamics about public spending and economic growth in Nigeria for 1970-2019, when ARDL model with structural breaks was used, capital spending impacted economic growth, which demonstrates Keynes's theory in Nigeria (Aluthge et al, 2021).…”

Section: Literature Reviewmentioning

confidence: 92%

Capital Spending and Economic Growth Correlation in Georgia

Mikeladze¹

2023

iem

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Nino Mikeladze Email:ninomikeladze88@gmail.com Doctoral student (Master’s in Economics) Ivane Javakhishvili Tbilisi State University Tbilisi, Georgia https://orcid.org/0009-0008-1214-7241 Government measures during the economic policy implementation should be based on the impact on economic growth and economic development. Moreover, as it is inevitable to have government expenditures, it is crucial to analyze what kind of relationship exists between economic growth and government expenditure. According to Keynes, government expenditure is the measure of the fiscal policy, On the other hand, according to Wagner, public spending is endogenous factor of economic development. There is no common attitude towards Wagner theory. Moreover, Wagner theory is considered to be valid for the long run period and results could be more valid in terms of economic as well as statistical interpretation, when longer time-series is taken. While exploting the dependence between economic growth and government spending, we should analyze the Armey-Rahn curve as well, which explains that up to some point, when government spending is increasing, economic activity is increasing as well, but then is starts to decline. The paper examines such dependence based on Wagner’s law and Keynes’s theory for Georgia, but using only capital spending as it is perceived as one of the main sources for economic growth. All the available data is used, during 1995-2022, for capital spending growth and economic growth indicators. The results show that Wagner’s law is not fulfilled meaning that economic growth is depended variable and capital spending growth is explanatory. The impact on economic growth is observed after 3 years, which makes sense if we consider the nature of capital spending. However, we can say that due to the lack of data and only two variables included in the analysis, the results might not be relevant.

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“…In the long run, the study observed that all variables exerted a significant influence on economic growth. In a related study [ 40 ], assessed the degree of the impact of government expenditure on growth in Nigeria. Accordingly, findings indicated evidence of a significant positive impact of government spending on growth both in the long and short run.…”

Section: Empirical Issues: a Brief Reviewmentioning

confidence: 99%