Public expenditure and economic growth nexus: Further evidence from Nigeria

Oyinlola, Abimbola

doi:10.5897/jeif2013.0489

Cited by 23 publications

(21 citation statements)

References 21 publications

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“…This is particularly true for developing countries where evidence of the positive growth effect of government expenditure can be found in earlier empirical studies conducted by [10,59]. These findings have been strengthened and supported subsequently by many studies including, [60,61,62,63]; etc.…”

Section: Neither Wagner Nor Keynesian Hypothesismentioning

confidence: 68%

Public Sector Spending and Economic Growth in Nigeria: In Search of a Stable Relationship

Idris

Bakar

2017

ARJASS

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In this study, recent development in government expenditure and epistemological literatures on the relationship between public spending and economic growth in Nigeria are examined. The primary aim of this paper is to explore the relationship between government expenditure and economic growth with the view to establishing a stable relationship. In view of that, an ARDL model is employed to provide the framework for estimating the existence or otherwise of the equilibrium relationship among the examined variables. However, government as an institution that provide welfare to the populace has a major role to play in deciding where priority spending should be allocated in order to enhance the developmental process and provide sustainable growth in the growing economy. In all submissions that debated on the relationship between public sector spending and economic growth, Keynesian philosophy was among the most prominent and celebrated in contrast to Wagner's Law. Keynes regards government spending as an exogenous factor which can be utilised as a policy instrument to promote economic growth. Despite the diverse and conflicting empirical evidence on the relationship between public sector expenditure and economic growth that prevail in the literature, the empirical findings from this paper based on the estimated result from ARDL model reveals the existence of positive and significant relationship between public spending on economic growth in Nigeria. Undeniably, government expenditures are considered to be highly important in creating opportunities and widening the productive base at Review Article 2 which developing countries can grow, Nigeria is inclusive. To achieve accelerated economic growth, there is need for an in-depth and broad macroeconomic reform in the Nigerian public finance to include certain features of transparency and effectiveness in the implementation of budgetary process. An essential part of the reform policy should be the review of public sector's roles and responsibilities in the development process and concentrate on the priority areas rather than act as a substitute of the private sector. The inclusion of certain measures on the reform policy will appear satisfactory, for instance, expenditure on public goods that improves the allocative efficiency in the presence of positive externalities should be accorded high priority, including investment in infrastructure, more access to information and communication technology, expenditure on research and development, as well as diversification of the economy.

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Section: Neither Wagner Nor Keynesian Hypothesismentioning

confidence: 68%

Public Sector Spending and Economic Growth in Nigeria: In Search of a Stable Relationship

Idris

Bakar

2017

ARJASS

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“…Results of the study showed that in the short run public spending had no impact on growth, but in the long run, a relationship was established between the two variables. Oyinlola and Akinnibosun (2013) examined the relationship between public expenditure and economic growth in Nigeria during the period 1970-2009. After confirming the Wagner's law, the result of the study further showed that economic growth and development were the main objectives of government expenditure, especially investment in infrastructure and human resources all of which fall under social and community services.…”

Section: Review Of Government Spending and Growth Nexusmentioning

confidence: 99%

Oil Revenue, Public Spending and Economic Growth Relationships in Nigeria

Aregbeyen¹,

Kolawole²

2015

JSD

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This study examined the relationships among oil revenue, government spending, and economic growth in Nigeria. By implication, it investigated whether oil revenue impacted on government spending, as well as on economic growth in the country over the period from 1980 to 2012. Time series data were analyzed using econometric techniques which included Ordinary Least Square (OLS), cointegration, Vector Error Correction Model (VECM), and Granger causality to determine the direction of causality and the magnitude of impacts of the variables. Findings from the analysis revealed that oil revenue Granger caused both of total government spending and growth, while there was no-causality between government spending and growth in the country. The study therefore suggested that government should increase spending on capital projects as well as intensify efforts at increasing output in the oil sub-sector in order to boost economic growth in Nigeria.

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“…For instance, Oyinlola and Akinbosun [4] used data over a period between 1970 and 2009 inclusive and employed disaggregated public expenditure data to confirm the validity of Wagner's law in the end. So also, Ayo, Ifeakachukwu and Ditimi [5] when employed data from 1970 to 2010 confirmed bidirectional relationship between the government expenditure and economic growth in the end, but in the short-run only wagner's law is established which supports the argument that growth is exogenous to expenditure in Nigeria, although they employed inflation as a third variable in their analysis.…”

Section: Introductionmentioning

confidence: 99%