Impact of Government Expenditure on Economic Growth In Sub-Saharan Africa: A Validity of Wagner’s Law

Kolapo, Funsho Tajudeen; Bolanle, Azeez; Mokuolu, Joseph; Oluwaleye, Taiwo; Alabi, Kehinde

doi:10.18535/ijsrm/v9i2.em01

Cited by 3 publications

(2 citation statements)

References 9 publications

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“…Additionally, it found evidence supporting both Wagner's theory and Keynes's hypothesis for the connection between growth and expenditure on education in Angola, while only Keynes's hypothesis was validated in Nigeria. Kolapo, et al (2021)…”

Section: Public Expenditure Theorymentioning

confidence: 99%

Effect of Government Recurrent Expenditure on Economic Prosperity in Nigeria

Igwe,

Inyiama

2024

EJAAFR

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The study investigated effect of government recurrent expenditure on economic prosperity in Nigeria. The specific objectives of the study were to examine effect of administration expenditure, economic services expenditure, and social and community services (which are proxies for government recurrent expenditure) on gross national product (proxied by economic prosperity) in Nigeria. The study adopted ex-post facto research design and secondary data were extracted from the CBN Statistical Bulletin for the period 1981 – 2022. The multiple regression was used for the test of hypotheses. Findings showed that, recurrent expenditure on administration (GREA) have a statistically non-significant positive effect on Gross National Product (GNP) in Nigeria with a t-statistic of -0.710148 and p-value of 0.4821. On the other hand, recurrent expenditure on economic services (GREES) has a statistically significant positive effect on GNP in Nigeria with a t-statistic of 2.106309 and p-value of 0.0420. In line with recurrent expenditure on administration, recurrent expenditure on social and community services (GRESCS) have a statistically non-significant positive effect on GNP in Nigeria with a t-statistic of 1.835944 and p-value of 0.0744. This implies that only recurrent expenditure on economic services can be used to predict economic prosperity in Nigeria. The study recommended that administrative efficiency should be improved through the reduction of unnecessary costs and streamlining of processes, supported by regular performance evaluations and the adoption of modern technology. Secondly, investments should prioritize critical infrastructure projects like transportation, energy, and telecommunications, aiming to stimulate economic growth and job creation. Lastly, targeted social programs are encouraged to address specific challenges such as poverty reduction, healthcare access, and education, ensuring adequate funding and effective reach to beneficiaries, while also investing in healthcare infrastructure and supporting community development projects that reduce inequality and promote social stability, resulting in long-term benefits for citizens' well-being.

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Section: Public Expenditure Theorymentioning

confidence: 99%

Effect of Government Recurrent Expenditure on Economic Prosperity in Nigeria

Igwe,

Inyiama

2024

EJAAFR

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“…Moreover, Adil et al [38] detected a weak relationship, while Wijeweera and Garis [39] and Konya and Abdullaev [7] could not reach a distinct conclusion on this issue. Husnain [40], Agayev [5], Bayrak and Esen [41], Magazzino [42], Karhan [43], Nirola and Sahu [44], Karas [45], and Balaban and Zivkov [46] who tested Wagner's Law with panel data analysis pointed out that Wagner's Law was valid in their studies; however, Kolapo et al [47] reached conclusions that did not support Wagner's Law.…”

Section: Selected Literaturementioning

confidence: 99%

Wagner's Law vs. Keynesian Hypothesis: Empirical Evidence for G20 Countries

Öztaşkın¹,

Kara²

2022

aeb

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The economic growth-public expenditure relationship is one of the important subjects that both policymakers and scientists focus on during extraordinary conditions such as economic crises, natural disasters or epidemics. Despite the privatization practices and the efforts to adopt the minimal state approach proposed by neoliberalism, which have become widespread significantly since the 1970s, public expenditures increase the interest in the subject. The study analyses the validity of the Keynesian approach, which argues that public expenditures are a fiscal policy tool that supports economic growth, in G-20 countries, as opposed to Wagner's approach, which argues that economic growth is the reason for the increase in public expenditures. The analysis was carried out with the Pesaran CCEMG estimator, which considers cross-sectional dependence and heterogeneity, using annual data from 1994-2017. According to the findings, it could be stated that Wagner's Law is not valid in G-20 countries because the slope coefficient does not fulfil the condition of being more significant than 1, whereas the Keynesian approach is valid. Moreover, a bidirectional causality was discovered between economic growth and public expenditures. Consequently, public expenditures can be used as an effective fiscal policy tool to eliminate economic instabilities under political, economic, or extraordinary conditions such as COVID-19.

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Wagner Kanunu’nun Geçerliliği: 1992-2021 Dönemi İçin Dünya’dan Kanıtlar

KARADENİZ

2024

Bulletin of Economic Theory and Analysis

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Bu çalışmada Wagner Kanunu’nun geçerliliği, 83 ülke ve 1992-2021 dönemi için araştırılmaktadır. Ayrıca çalışma, Wagner Kanunu’nu kişi başı milli gelirin yanı sıra onu da kapsayan bir gösterge olan insani gelişme endeksi üzerinden test etmektedir. Gengenbach, Urbain ve Westerlund (2016) ve Genişletilmiş Ortalama Grup Tahmincisi yöntemlerinin kullanıldığı çalışmanın sonuçlarına göre; Wagner Kanunu, 86 ülkesinin 26’sında geçerlidir. Bu ülkelerden 9’unda ise Wagner Kanunu hem kişi başı milli gelire hem de insani gelişme endeksine göre geçerlidir.

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Impact of Government Expenditure on Economic Growth In Sub-Saharan Africa: A Validity of Wagner’s Law

Cited by 3 publications

References 9 publications

Effect of Government Recurrent Expenditure on Economic Prosperity in Nigeria

Effect of Government Recurrent Expenditure on Economic Prosperity in Nigeria

Wagner's Law vs. Keynesian Hypothesis: Empirical Evidence for G20 Countries

Wagner Kanunu’nun Geçerliliği: 1992-2021 Dönemi İçin Dünya’dan Kanıtlar

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