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On the Causal Relationship between Government Expenditure and Tax Revenue in Pakistan

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  • M. Haider Hussain

    (Social Policy Develop Centre (SPDC), Karachi, Pakistan.)

Abstract

This paper applies the technique of Granger Causality to determine the relationship between total government expenditures and total tax revenue using annual revised estimates. The analysis discovers a firm unidirectional effect from expenditure to revenue suggesting the preference of controlling the spending decisions to reduce the tax revenue-expenditure deficit.

Suggested Citation

  • M. Haider Hussain, 2004. "On the Causal Relationship between Government Expenditure and Tax Revenue in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 9(2), pages 105-117, Jul-Dec.
    • Handle: RePEc:lje:journl:v:9:y:2004:i:2:p:105-117
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    References listed on IDEAS

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    8. Paul R. Blackley, 1986. "Causality Between Revenues and Expenditures and the Size of the Federal Budget," Public Finance Review, , vol. 14(2), pages 139-156, April.
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    Cited by:

    1. Taner TURAN & Mesut KARAKAŞ, 2018. "The Relationship between Government Spending and Revenue: Nonlinear Bounds Testing Approach (NARDL)," Sosyoekonomi Journal, Sosyoekonomi Society.
    2. Dilshad Ahmad & Bilal Sarwar & Kiran Sarwar & Bilal Tariq, 2022. "Government revenue and Expenditure Nexus: Empirical Evidence of Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 246-252, December.
    3. Tran, My Thi Ha, 2021. "Public Sector Management And Corruption In Asean Plus Six," OSF Preprints stxw4, Center for Open Science.
    4. Felix Kimtai Kiminyei, 2019. "Empirical Investigation on the Relationship among Kenyan Public Debt, Tax Revenue and Government Expenditure," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(1), pages 142-159, March.

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