DOES PUBLIC SPENDING GROWTH STIMULATE ECONOMIC DEVELOPMENT? EMPIRICAL EVIDENCE FROM NIGERIA

Dickson Oriakhi () and Vincent Ajayi-Ojo ()
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Dickson Oriakhi: UNIVERSITY OF BENIN, BENIN CITY, EDO STATE, NIGERIA
Vincent Ajayi-Ojo: UNIVERSITY OF BENIN, BENIN CITY, EDO STATE, NIGERIA

No 3105275, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

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.

Keywords: Public Spending; Gross Domestic Product; Cointegration; Error Correction Model and Nigeria. (search for similar items in EconPapers)
JEL-codes: C22 E62 H52 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2015-11
New Economics Papers: this item is included in nep-afr and nep-mac
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Published in Proceedings of the Proceedings of the 20th International Academic Conference, Madrid, Nov 2015, pages 329-341

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