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Does Public Spending Growth Stimulate Economic Development? Empirical Evidence From Nigeria

Author

Listed:
  • DICKSON ORIAKHI

    (UNIVERSITY OF BENIN, BENIN CITY, EDO STATE, NIGERIA)

  • VINCENT AJAYI-OJO

    (UNIVERSITY OF BENIN, BENIN CITY, EDO STATE, NIGERIA)

Abstract

The main objective of this paper is to ascertain empirically the impact of government expenditure on economic development in Nigeria. The time series data for this study spans from 1981 through 2013. The study adopts the Cointegration analysis. The Error Correction model shows that the various functional government expenditures were statistically significant and have positive relationship with gross domestic product. However, government expenditures on education and health have no significant impact on economic development in the short term. The coefficient of the Error correction model showed that the deviation of gross domestic product from its long-run equilibrium value will be reconciled quickly. On the whole, our study reveals that public spending enhances economic development in the long term and that a long run relationship exists between government expenditure and economic development in Nigeria.

Suggested Citation

  • Dickson Oriakhi & Vincent Ajayi-Ojo, 2015. "Does Public Spending Growth Stimulate Economic Development? Empirical Evidence From Nigeria," Proceedings of International Academic Conferences 3105275, International Institute of Social and Economic Sciences.
  • Handle: RePEc:sek:iacpro:3105275
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    References listed on IDEAS

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    5. Robert J. Barro & Xavier Sala-I-Martin, 1992. "Public Finance in Models of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 645-661.
    6. 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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    More about this item

    Keywords

    Public Spending; Gross Domestic Product; Cointegration; Error Correction Model and Nigeria.;
    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
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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