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Public sector expenditure in agriculture and economic growth in Nigeria: An empirical investigation

Author

Listed:
  • Tijani, Akeem A.
  • Oluwasola, Olumemino
  • Baruwa, Olayinka I.

Abstract

Available literature has shown that the impact of total government expenditure as well as government expenditure by type of economic growth is mixed. This study extends this literature by examining the impact of government expenditure on agriculture, on Nigeria's economy from 1970 to 2006. General-to-specific methodology of time series econometrics was utilised to arrive at the preferred error correction model that was used to determine the impact of government spending on agriculture and on economic growth. In consonance with economic theory, the results showed that the total expenditure on agriculture had a positive significant effect on Nigeria's economic growth in the long run with elasticity of 0.32 during the period under review. The results also showed that economic growth was independent of recurrent expenditure, but dependent (positively) on capital expenditure in the long run with elasticity of 0.36. The implication is that agriculture should be given priority in budgetary allocation and capital spending to promote economic growth in Nigeria.

Suggested Citation

  • Tijani, Akeem A. & Oluwasola, Olumemino & Baruwa, Olayinka I., 2015. "Public sector expenditure in agriculture and economic growth in Nigeria: An empirical investigation," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 54(2), September.
    • Handle: RePEc:ags:agreko:346839
    DOI: 10.22004/ag.econ.346839
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    References listed on IDEAS

    as
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    2. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    3. Grossman, Philip J, 1988. "Growth in Government and Economic Growth: The Australian Experience," Australian Economic Papers, Wiley Blackwell, vol. 27(50), pages 33-43, June.
    4. Philip Grossman, 1988. "Government and economic growth: A non-linear relationship," Public Choice, Springer, vol. 56(2), pages 193-200, February.
    5. Ram, Rati, 1986. "Government Size and Economic Growth: A New Framework and Some Evidencefrom Cross-Section and Time-Series Data," American Economic Review, American Economic Association, vol. 76(1), pages 191-203, March.
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    Agribusiness; Financial Economics;

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