Impact of Government Sectoral Expenditure on Economic Growth in Ethiopia

Garoma, Tufa; Bersisa, Mekonnen

doi:10.1007/978-981-10-8126-2_6

Cited by 3 publications

(4 citation statements)

References 6 publications

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“…Te other factor that afects GDP in Ethiopia is expenditure on agriculture. It has a negative long-run impact, a result similar to Teshome [38], Garoma and Bersisa [48], and Bazezew and Alemu [49]. Te insignifcant and negative long-run efect of agriculture is especially expected from the perspective of economic theory, policy and strategy of the Ethiopian government, the share of agriculture to GDP in the long run should decline and hence investment on agriculture also should be decreased and probably transformed in to industrial economy.…”

Section: Vector Error Correction Modelmentioning

confidence: 72%

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Effect of Public Expenditure on Economic Growth in the Case of Ethiopia

Emeru

2023

The Scientific World Journal

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This study’s primary goal was to explain how Ethiopia’s economic growth affected government spending. The time series data utilized in the study were gathered between 1980 and 2018. The time series data were subjected to the Johansen cointegration test and the vector error correction model (VECM) in order to evaluate the short- and long-term correlations between public spending and economic growth in Ethiopia. According to the study, both long- and short-term economic growths are positively and significantly impacted by government spending on education. Long-term economic growth is negatively impacted by government expenditure on agriculture, while short-term effects are negatively impacted and considerable. In the long run, investment spending has a positive but negligible impact on economic growth; however, in the short run, it has a negative but large effect. Defense spending by the government has a positive and negligible effect on economic growth over the short and long terms. Both in the short and long terms, spending on health has a favorable and considerable impact on economic growth. According to the study, government spending on the education sector would help to foster the conditions that could result in higher labor force participation rates and, consequently, higher rates of economic growth. Aiming to establish a healthy and productive society that promotes economic progress, policy should focus on complementary measures to scale-up initiatives in the health sector.

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Section: Vector Error Correction Modelmentioning

confidence: 72%

“…This result is similar with the previous studies such as [ 38 , 45 , 46 ] and [ 47 ]. But it is against Menyah and Wolde-Rufael [ 19 ] and Garoma and Bersisa [ 48 ]. However, expenditure on education and health has a positive and statistically significant impact on economic growth.…”

Section: Resultsmentioning

confidence: 99%

Effect of Public Expenditure on Economic Growth in the Case of Ethiopia

Emeru

2023

The Scientific World Journal

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“…Similarly, Chu et al, (2020), Amusa and Oyinola (2019), Ndubuisi (2018), Garoma and Bersisa (2018), Selvanathan et al, (2021), Arestis et al, (2021), Lupu et al, (2018), Mazorodze (2018) demonstrated using various analytical techniques that effect of government expenditure on growth depends on the sector recipient or functional component of government expenditure. In relation to government agricultural expenditure and economic growth Shuaib et al (2015), Ebenezer et al, (2019), and Dkhar and De (2018) showed that government expenditure on agriculture does influence agricultural productivity and economic growth positively in Nigeria, South Africa and Russia, respectively.…”

Section: Government Expenditure and Economic Growth: Empiricsmentioning

confidence: 92%

Effect of Government Agricultural Expenditure on Economic Growth: Evidence from a Developing Country

Mothae

Relebohile

2022

Studia Universitatis Babes-Bolyai Oeconomica

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Fiscal policy has been used by various governments to promote economic growth. The effectiveness of government expenditure on economic growth depends on recipient sector of government expenditure. This study contributes to this research area by investigating the effect of government agricultural expenditure on economic growth in the Kingdom of Lesotho. The government of Lesotho identified the agricultural sector as a productive sector that is central to the achievement the economic growth goal and development plan. Descriptive statistics and inferential econometric techniques (ARDL, DOLS and VEC Granger causality) over time-series data for the period 1982-2019 were utilized in this study. The results suggest that while current level and pattern of government agriculture expenditure cannot stimulate the desired economic growth and prosperity in the country, domestic investment appear to be a stimulant of the desired economic prosperity. Consequently, any economic growth policy or strategy that is premised on government agricultural sector expenditure would fail. Thus study recommends that countries including Lesotho should prioritize sustained increase in domestic investment.

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“…This is related to the Okun's law that found a positive relationship between economic growth and employment generation. Although the drivers of economic development are not without government intervention, there are divergent views on the link of government intervention and the outcomes (Sedrakyan and Candamio, 2019;Gitana et al, 2018;Tanchev, 2016;Forte and Magazzino, 2016;Gisore et al, 2014;Usman et al, 2011). However, the underpinning theories emphasized government intervention as the key component for economic development, especially in mitigating the market mechanism crisis.…”

Section: Drivers Of Unemployment Intensity In Ssamentioning

confidence: 99%

Drivers of unemployment intensity in sub-Saharan Africa: do government intervention and natural resources matter?

Akinyele

Oloba²,

Mah

2022

REPS

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PurposeAfrican countries are endowed with both human and natural resources. These resources constitute integral components for any economic development due to the long-lasting relationship with all sectors in an economy, yet there is an obvious disagreement between growing economy and employment generation in Africa. Though there has been a growing pattern of economic size, particularly the gross domestic product (GDP) among African countries, most of these economies are low in human development. The disagreement between economic growth and employment generation in Africa despite abundant natural resources located on the continent calls for public discourse among scholars. Therefore, the purpose of the study is to examine the peculiar drivers of unemployment intensity in a region characterized by endowed resources.Design/methodology/approachThe paper adopts two approaches; the authors employed the pooled mean group (PMG) estimator and utilised stochastic frontier analysis (SFA) to generate a government efficiency index between the period 1991 and 2017 among sub-Saharan Africa (SSA) countries.FindingsThe empirical results through the single output-multiple inputs framework indicate that on average, there is a low level of government efficiency towards increasing the objective of human development in Africa. However, in the long run, natural resource endowment has a positive and significant relationship with employment generation for SSA. Hence, the study established that a low level of government efficiency has a long-lasting effect on low human development experienced in Africa.Social implicationsThe need to improve the level of government efficiency towards economic development by making both human and physical capital more effective will spur the exploration of natural resources.Originality/valueThe paper provides an empirical study of the effectiveness and efficiency of government through PMG and SFA in establishing the relationship between government approaches and employment level in selected SSA countries.

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Impact of Government Sectoral Expenditure on Economic Growth in Ethiopia

Cited by 3 publications

References 6 publications

Effect of Public Expenditure on Economic Growth in the Case of Ethiopia

Effect of Public Expenditure on Economic Growth in the Case of Ethiopia

Effect of Government Agricultural Expenditure on Economic Growth: Evidence from a Developing Country

Drivers of unemployment intensity in sub-Saharan Africa: do government intervention and natural resources matter?

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