Empirical Analysis of the Wagner Hypothesis of Government Expenditure Growth in Kenya: ARDL Modelling Approach

Manyeki, John Kibara; Kotosz, Balázs

doi:10.18096/tmp.2017.02.05

Cited by 4 publications

(7 citation statements)

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“…This study slightly modified Anoke, Odo, Chukwu & Agbi (2017) transposition methodology by adopting WH - Peacock & Wiseman proposition without dilution. This is as corroborated in the works of Manyeki & Kotosz (2017) and Jaen-Garcia (2017). In this regard, TGS is the sum total of government spending on all activities and, are in their natural log form on the left hand side while, real gross domestic product is on the right-hand of the model.…”

Section: Methodssupporting

confidence: 77%

“…Particularly, some like Gatsi et al. (2019) ; Aktan (2017) ; Sekantsi and Molapo (2017) ; Manyeki & Kotosz (2017) , Salwindi & Seshamani (2016) , Moore (2016) , Atasoy and Gur (2016) , Eze (2016) , Ampah & Kotosz (2016) , Anoke, et al. (2016) , Barra et al.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This proposition was hatched around 1883. Ever since the unveiling of this proposition, followers of this view have expressed mixed opinions ( Gatsi et al., 2019 ; Manyeki and Kotosz, 2017 ; Keho, 2017 ; Lawal et al., 2020 ; Asaleye et al., 2020 ; Lawal et al., 2019 ; Babajide et al., 2020 ; Olanrele et al., 2020 ; Aktan, 2017 ; Ifeyinwa, Idenyi, Chibuzor & Agbi, 2016; Eze, 2016 ; Salwindi and Seshamani, 2016 ; Dahunsi et al., 2019 ; Moore, 2016 ; Atasoy and Gur, 2016 ; Ampah and Kotosz, 2016 ; Magazzino et al., 2015 ; Funashima, 2015 ). Among early versions that propelled dichotomization of WP are that of Peacock and Wiseman (PW) (1961) , Musgrave (1969) , Gupta (1967) , Goffman (1968) , Peacock & Wiseman shared version (1967) , among others; each explaining its own version of the proposition based on their scholarly standpoint.…”

Section: Introductionmentioning

confidence: 99%

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Wagner proposition in Nigeria: An econometric analysis

Babajide

Okunlola

Nwuba

et al. 2020

Heliyon

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Succinct exploration of Adolph Wagner's Proposition [WP] 1883-Peacock and Wiseman 1961version was put to the validation test in the study. At least, this time, for a quinaquina octo annis period, representing the life span of Nigeria. Specific suspicion of shocks from data from the world indicator and monetary authority necessitated the adoption of the ADF test with structural breaks, which came out positive at alternating integrating order. This propelled the Autoregressive Distributed Lag ARDL model path having specified the lag selection automatically. Even though the series showed significant association in the short run, and bi-directional causality, the result of the Bound test-F-statistics (calculated) ¼ 3.42 falls below upper Bound I(0) ¼ 4.68 and lower bound I(1) ¼ 5.15 hence, invalidates the WP position in the longrun in Nigeria. This is an indication that a reduction in noneconomically viable and overlapping, funds-straining ministries/departments/agencies (MDA) is indispensable.

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Section: Methodssupporting

confidence: 77%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Wagner proposition in Nigeria: An econometric analysis

Babajide

Okunlola

Nwuba

et al. 2020

Heliyon

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“…In Kenya, Manyeki and Kotosz (2017) used Autoregressive Distributed Lag stated that there was a resistance to the Wagner's Law. The results showed a negative and one-way relationship from the government expenditure to the economic growth.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…Furthermore, when the government expenditure increased, the economic growth would also increase (Ighodaro & Oriakhi, 2010;Ismal, 2011;Kurniawati, 2018;Kyaw, 2018;Magazzino et al, 2015;Mohammadi & Ram, 2015;Neduziak & Correia, 2017;Okoro, 2013;Uddin & Aziz, 2015). In addition, the relationship between the two variables showed a negative effect where there was an increase in the government expenditure, it would lower the economic growth (Hasnul, 2016;Manyeki & Kotosz, 2017;Maurya & Sigh, 2017;Ogundipe & Oluwatobi, 2013).…”

Section: Introductionmentioning

confidence: 99%

Does the Wagner’s Law exist in a strategic national area? An evidence from Kedungsepur - Indonesia

Sasongko¹,

Huruta²,

Wardani³

2019

IRD

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The Kedungsepur National Strategic Area was formed to realize urban areas as the center of national and international economic activities. In order to realize this goal, government expenditure and economic growth are important variables in the development process. Empirically, the study was conducted to analyze the relationship between government expenditure and economic growth from the perspective of Wagner's Law in 6 regencies or cities in the Kedungsepur National Strategic Area during 2012 to 2017. Methodically, this study used Panel Granger Causality and Panel Data Regression to explain the short-term relationship between both variables. The results showed that there was a negative one-way relationship from economic growth to government expenditure. The increase in economic growth in the previous year would reduce the government expenditure in the short term, resulting the Wegner's Law inapplicable in the Kedungsepur National Strategic Area. This was due to the ineffectiveness of institutions, differences in regional expenditure structures towards state expenditures and the lack of government work programs in the productive sector. Thus, a good and coordinative institutional environment was needed to realize the cooperation in crucial sectors, as well as the distribution of regional expenditures on more productive expenditures based on priority interests, aiming at the welfare of the community.

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Military spending crowding out health and education spending: which views are valid in Egypt?

Elish

Ahmed

AboElsoud

2023

Humanit Soc Sci Commun

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This study examines the relationship between government spending, specifically military spending, government spending on health, government spending on education, and economic growth in Egypt over the period from 1980 to 2021. The paper utilizes a Granger causality test to detect the directional relationship between spending components and GDP growth. Furthermore, an autoregressive distributed lag (ARDL) model, including error-correction models, was established to determine the long- and short-term relationships among these variables. The study contrasts Wagner’s versus Keynes’s views of the government spending relationship with economic growth, with a greater emphasis on Keynes’s argument for military spending enhancing economic growth. While previous studies have investigated the relationship between aggregate spending and economic growth from a single or two-way direction of causality, the present study contributes to the literature by exploring the possibility of military spending crowding out spending on health and education and detecting this causality and dynamic relationship. The empirical results support the Keynesian view of causality from all government spending components to economic growth. However, short- and long-term analyses revealed a negative relationship between military spending and economic growth. Moreover, the short-term impact of government spending on education and health on economic growth is negative, but positive in the long-term. Finally, the causality test revealed that military spending influences health and education spending. Additionally, a unidirectional relationship exists between military spending and health expenditure, which requires further research. The policy implication of this study shows that although spending is exogenous to economic growth, it does not align with the Keynesian view of inducing growth. Instead, spending has negative current and future implications for economic development.

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Empirical Analysis of the Wagner Hypothesis of Government Expenditure Growth in Kenya: ARDL Modelling Approach

Cited by 4 publications

References 0 publications

Wagner proposition in Nigeria: An econometric analysis

Wagner proposition in Nigeria: An econometric analysis

Does the Wagner’s Law exist in a strategic national area? An evidence from Kedungsepur - Indonesia

Military spending crowding out health and education spending: which views are valid in Egypt?

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