Government Spending and Economic Growth in Nigeria (1980-2011)
Keywords:
economic growth, government spending, recurrent expenditure, capital expenditure, Nigeria
Abstract
Using time series data of 32years period (1980- 2011), this study investigated the impact of government spending on the Nigerian economic growth. Employing the ordinary least square multiple regression analysis to estimate the model specified. Real Gross Domestic Product (RGDP) was adopted as the dependent variable while government capital expenditure (GCEXP) and government recurrent expenditure (GREXP) represents the independent variables. With the application of Granger Causality test, Johansen Co- integration Test and Error Correction Mechanism, the result shows that there exists a long-run equilibrium relationship between government spending and economic growth in Nigeria. The short-run dynamics adjusts to the long-run equilibrium at the rate of 60% per annum. The policy implication is that that both the short-run and long-run expenditure has significant effect on economic growth of Nigeria. In line with the findings, we recommend that Government increase both capital expenditure (investment in roads, power supply, transport, and communication) and recurrent expenditure mostly on issues that should attract economic growth. Funds meant for development of the Nigerian economy should be properly managed by the executive arm to boost employment as well as improve the wellbeing of citizens since this will cause economic growth indirectly.
Downloads
- Article PDF
- TEI XML Kaleidoscope (download in zip)* (Beta by AI)
- Lens* NISO JATS XML (Beta by AI)
- HTML Kaleidoscope* (Beta by AI)
- DBK XML Kaleidoscope (download in zip)* (Beta by AI)
- LaTeX pdf Kaleidoscope* (Beta by AI)
- EPUB Kaleidoscope* (Beta by AI)
- MD Kaleidoscope* (Beta by AI)
- FO Kaleidoscope* (Beta by AI)
- BIB Kaleidoscope* (Beta by AI)
- LaTeX Kaleidoscope* (Beta by AI)
How to Cite
References
Abdullah (2000) The Relationship between Government Expenditure and Economic Growth in Saudi Arabia. 12(2), 173-191.
John Abell (1990) The Role of the Budget Deficit during the Rise in the Dollar Exchange Rate from. 57(1), 66. https://doi.org/10.2307/1060478
S. Abu-bader, A. Abu-Qarn (2003) Government expenditures, military spending and economic growth: causality evidence from Egypt, Israel, and Syria. http://mpra.ub.uni-muenchen.de/1115/
N. Abu, U. Abdullahi (2010) Government Expenditure and Economic Growth in Nigeria, 1970- 2008: A Disaggregated Analysis.
E. Akpan (2005) Local Government Expenditure.
Yousif Al-Yousif (2000) Do Government Expenditures Inhibit or Promote Economic Growth: Some Emprirical Evidence from Saudi Arabia. 48(2), 92-96. https://doi.org/10.1177/0019466220000210
Robert Barro, Xavier Sala-i-Martin (1992) Public Finance in Models of Economic Growth. 59(4), 645. https://doi.org/10.2307/2297991
Arusha Cooray (2009) Government Expenditure, Governance and Economic Growth. 51(3), 401-418. https://doi.org/10.1057/ces.2009.7
Robert Engle, C. Granger (1989) Co-Integration and Error Correction: Representation, Estimation, and Testing. 55(2), 251. https://doi.org/10.2307/1913236
William Easterly, Sergio Rebelo (1993) Fiscal Policy and Economic Growth: An Empirical Investigation. 32(3), 417-458. https://doi.org/10.1016/0304-3932(93)90025-b
B. Erkin (1988) Government Expenditure and Economic Growth: Reflections on Professor Ram's Approach, A New Framework and Some Evidence from New Zealand Ti Series Data. 25(1), 59-66.
A. Fajingbesi, A. Odusola (1999) Public Expenditure and Growth. A Paper Presented at a Training Programme on Fiscal Policy Planning Management in Nigeria, Organized by NCEMA. 137-179.
Folster S, Henrekson M (2001) Growth effects of government expenditure and taxation in rich countries. 45(8), 1501-1520. https://doi.org/10.1016/s0014-2921(00)00083-0
Goetz (1977) Optimal Levels of Spending and Taxation in Canada. 53-68.
D. Gujarati, D. Porter (2009) Basic Econometrics, New York: McGraw-Hill. 922.
Iyoha M (2002) Macroeconomics: Theory and Policy.
C. Ighodaro, D. Okiakhi (2010) Does the Relationship Between Government Expenditure and Economic Growth Follow Wagner's Law in Nigeria?. 10(2), 185-198.
S. Johansen, K. Jesulius (1990) Maximum Likelihood Estimation and Estimation and Inference on Cointegration: with Applications to the Demand for Money. 52(2), 169-210. https://doi.org/10.1111/j.1468-0084.1990.mp52002003.x
M. Loto (2011) Impact of government Sectoral Expenditure on Economic Growth. 3(11), 646-652.
O. Maku (2009) Does Government Spur Economic Growth in Nigeria? MPRA Paper. http://mpra.ub.uni-muenchen.de/17941
O. Obinna (1985) Public Finance, Nsukka. 210.
G. Ogiogio (1995) Government Expenditure and Economic Growth in Nigeria.
A. Olugbenga, O. Owoye (2007) Public Expenditure and Economic Growth, New Evidence from OECD Countries.
O. Oyinlola (1993) Nigeria's National Defence and Economic Development: An Impact Analysis.
M. Olukayode (2009) Does Government Spending Spur Economic Growth in Nigeria? MPRA paper. 17941.
Ram R (1986) Government Size and Economic Growth: A New Framework and Some evidence from Cross-Section and Time-Series Data. 76, 191-203.
K. Ranjan, C. Sharma (2008) Government Expenditure and Economic Growth: Evidence from India. 6(3), 60-69.
W. Saad, K. Kalkechi (2009) The Nature of Government Expenditure and its Impact on Sustainable Economic Growth. 1(4), 39-47.
R. Ram (1986) Causality between Income and Government Expenditure: A Broad International Perspective. 41, 393-413.
Published
2013-09-02
Issue
Section
License
Copyright (c) 2013 Authors and Global Journals Private Limited
This work is licensed under a Creative Commons Attribution 4.0 International License.