An assessment of the relationship between public debt, government expenditure and revenue in Namibia

Iiyambo, Hambeleleni; Kaulihowa, Teresia

doi:10.3326/pse.44.3.3

Cited by 2 publications

(4 citation statements)

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“…A percent increase in public debt raises public expenditure by 0.179 percent and by 0.355 percent in the short-and long-run, respectively. The positive linear effect of public debt on public expenditure is consistent with previous findings (Abu et al, 2022;Ahaisibwe, 2018;Del Monte & Pennacchio, 2020;Fagge & Ibrahim, 2018;Iiyambo & Kaulihowa, 2020;Ncanywa & Masoga, 2018;Ouattara, 2006;Ukwueze, 2015). In contrast, the coefficient of squared public debt is statistically significant and negatively related to public expenditure both in the short-and long-term, at the 5 percent level.…”

Section: Results Of Estimation Of the Ardl Modelsupporting

confidence: 90%

“…At country-specific level, researchers have also assessed the impact of public debt on public expenditure, particularly in developing countries such as Bangladesh, Kenya, Namibia, Nigeria, South Africa, including Uganda, and found that public debt (stock, servicing) is positively related to aggregate and/or components of public expenditure (Abu et al, 2022;Ahaisibwe, 2018;Fagge & Ibrahim, 2018;Firoj et al, 2018;Iiyambo & Kaulihowa, 2020;Kiminyei, 2014Kiminyei, , 2019Ncanywa & Masoga, 2018;Omodero, 2019;Ukwueze, 2015). On the contrary, some authors discovered that public debt (stock and servicing) decelerates public expenditure (Adamu, 2016;Aregbeyen & Akpan, 2013).…”

Section: Review Of Literature On Public Expenditure and Debt Relation...mentioning

confidence: 99%

“…For instance, Buchanan and Wagner (1977) claimed that debt-financed deficit tends to produce higher levels of public expenditure. The authors' argument rests on the premise that rising debt (and/or deficit) creates a counterfactual perception amongst citizens that the cost of public goods and services have become cheaper, thus, they will increase their demand for such goods and services (including transfers), leading to an expansion in public expenditure (Buchanan & Wagner, 1977;Iiyambo & Kaulihowa, 2020). A number of empirical studies appear to support this view (Abu et al, 2022;Del Monte & Pennacchio, 2020;Fagge & Ibrahim, 2018;Iiyambo & Kaulihowa, 2020;Ncanywa & Masoga, 2018;Ouattara, 2006;Ukwueze, 2015).…”

Section: Introductionmentioning

confidence: 99%

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Non-Linear Effect of Government Debt on Public Expenditure in Nigeria: Insight from Bootstrap ARDL Procedure

Abu¹,

David²,

Gamal³

et al. 2022

OMEE

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This study employs the bootstrap autoregressive distributed lag (ARDL) approach alongside the dynamic ARDL simulations technique to investigate the non-linear effect of public debt on public expenditure in Nigeria during the 1981–2020 period. The result of the bootstrap bounds test illustrates the presence of a long-term relationship between public expenditure and public debt (along with oil rents, output growth and urbanisation). Further, the estimation results indicate that the effect of public debt on public expenditure is non-linear. In particular, public expenditure increases at early stages of rising public debt but declines at latter phases when public debt grows beyond specific threshold. This empirical outcome is further validated by the dynamic ARDL simulations approach which shows a significant decline in predicted public expenditure after short-term expansion due to counterfactual shock in public debt. Thus, policies which diversify public revenue from oil production and a reversal of the rising trend in public debt are recommended to avert the adverse welfare implications of declining public expenditure.

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Section: Results Of Estimation Of the Ardl Modelsupporting

confidence: 90%

Section: Review Of Literature On Public Expenditure and Debt Relation...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Non-Linear Effect of Government Debt on Public Expenditure in Nigeria: Insight from Bootstrap ARDL Procedure

Abu¹,

David²,

Gamal³

et al. 2022

OMEE

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show abstract

“…Rauf (2018) examine the effect of corporate characteristics on companies debt. Liyambo & Kaulihowa (2020) examine the connection government revenue, expenditure and national be-tween government expenditure, government revenue and national debt in Namibia. Data were obtained for the period of 1980 to 2018.…”

Section: Literature Review Theoretical Framework and Hypotheses Devel...mentioning

confidence: 99%

An Empirical Evidence of the Impact of Government Tax Revenue on Nigerian Public Debt

Wang¹

2021

JAROE

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Objective The major objective of this paper is to examine the existence of a mutual consen-sus on the effect of tax revenue and non-tax revenue on public debt in Nigeria.Design/methodology – The study uses documentary research design. Data was collect-ed using secondary method of data collection from Debt Management office and Bureau of statistics and Central Bank of Nigeria statistical bulletin data bank. Ordinary Least Square Multi regression model was used in analyzing the dataResults – The research found out that there is a negative an insignificant relationship be-tween tax revenue, non-tax revenue and interest rate in relation to Nigerian public debt. Moreover, the paper found out that exchange rate and population rate had significant and positive relationship with Nigerian public debt.Limitation/Suggestion – The implication of the study is that, the contribution of tax revenue to the reduction of public debt is minimal as could be shown from the results. While, non-tax revenue contributed more than tax revenue in public debt reduction in Nigeria. In addition, increase in exchange rate, and population rate contributed more to increase in pub-lic debt, while, an increase in interest rate does not increase public debt but rather it discour-ages the government from collecting more debt and push the government to go for other rev-enue sources that where not assessed. The study recommended that; government should harness untapped taxes to increase tax revenue generation to pay interest on loan and princi-pal. Must of the information at the researcher disposal used for the study was for 15 years, from 2003 to 2018. Thus, studies need to be conducted involving more year like from 20 years upward to see whether it will change the result.Novelty/Originality – The originality of this research lies on the government inability to generate enough tax revenue and non-tax revenue to meet expenditure without collecting debt. This is because collection of debt always leads to frequent increase in debt burden in Nigeria. Fewer or no one has carried out a careful analysis of the relationship between tax and non-tax revenue against total debt in Nigeria.

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An assessment of the relationship between public debt, government expenditure and revenue in Namibia

Cited by 2 publications

References 0 publications

Non-Linear Effect of Government Debt on Public Expenditure in Nigeria: Insight from Bootstrap ARDL Procedure

Non-Linear Effect of Government Debt on Public Expenditure in Nigeria: Insight from Bootstrap ARDL Procedure

An Empirical Evidence of the Impact of Government Tax Revenue on Nigerian Public Debt

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