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The Growth of Government Spending in Lesotho

Author

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  • Retselisitsoe I. Thamae

    (Department of Economics, National University of Lesotho, P.O. Roma 180, Maseru, Lesotho)

Abstract

The paper analyses the dynamics of government spending growth in Lesotho using the multivariate cointegration techniques for the period 1980-2010. The results indicate that government spending is positively related to income and population while negatively related to tax share in the long-run. The latter supports the idea of fiscal illusion caused by budget deficits, which lessen the perceived cost of public spending to taxpayers. The role of internal and external shocks on government spending is also investigated in this study but such factors are found to be less important in determining the growth of government expenditure in Lesotho.

Suggested Citation

  • Retselisitsoe I. Thamae, 2013. "The Growth of Government Spending in Lesotho," Economic Analysis and Policy, Elsevier, vol. 43(3), pages 339-352, December.
    • Handle: RePEc:eee:ecanpo:v:43:y:2013:i:3:p:339-352
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    Citations

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    Cited by:

    1. Hajamini, Mehdi & Falahi, Mohammad Ali, 2018. "Economic growth and government size in developed European countries: A panel threshold approach," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 1-13.
    2. Olufemi Samuel Adegboyo & Sunday Anderu Keji & Oluwadamilola Tosin Fasina, 2021. "The impact of government policies on Nigeria economic growth (case of fiscal, monetary and trade policies)," Future Business Journal, Springer, vol. 7(1), pages 1-14, December.
    3. Ramashamole, Paseka B. & Thamae, Retselisitsoe I., 2015. "The Growth of Health Expenditure in Lesotho," African Journal of Economic Review, African Journal of Economic Review, vol. 3(2), July.
    4. Akram, Vaseem & Rath, Badri Narayan, 2020. "Optimum government size and economic growth in case of Indian states: Evidence from panel threshold model," Economic Modelling, Elsevier, vol. 88(C), pages 151-162.

    More about this item

    Keywords

    Government spending; fiscal illusion; cointegration; error correction; Lesotho;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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