Public Expenditure and Economic Development: New Evidence from Economic Community of West African States (ECOWAS)

This study empirically investigates the relationship between public expenditure and economic development in the Economic Community of West African States (ECOWAS) countries. It employs panel data analysis to investigate the relationship between public expenditure and economic development in thirteen (13) ECOWAS countries based on data availability. The analysis is based on relevant data from World Development Indicators (WDI) spanning from 1990 to 2021. The study employs descriptive and quantitative analysis, with the Human Development Index (HDI) serving as proxy for economic development. In accomplishing the primary objective of this study, Autoregressive Distributed Lag (ARDL) and Fully Modified Ordinary Least Squared (FMOLS) techniques were employed, using the latter technique for robustness of the results. The regression analysis reveal that there is a long run but insignificant relationship between public expenditure and economic development in ECOWAS countries for the period under review. The study concludes that public expenditure has not been utilized optimally for economic development in these countries. The study thus, recommends as a matter of urgency, plethora of policies to make ECOWAS countries develop economically from its present status of the least developed region globally. Such recommendations include sound monetary and fiscal policy, increased government expenditure on education, increase in primary school enrolment, increase in labour force participation that will enhance increase in employment generation and diversification of economy from natural resources (e.g crude oil, gold, uranium) to other viable sectors of the economy, thereby resulting in rapid economic development in the region.