Public spending and economic growth in Ivory Coast: Wagner’s law

Siriki Coulibaly and Pierre Guei
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Siriki Coulibaly: Department of Economics, Université Péléforo Gon Coulibaly, Korhogo, Côte d'Ivoire
Pierre Guei: Department of Economics, Université Péléforo Gon Coulibaly, Korhogo, Côte d'Ivoire

Economic Analysis Letters, 2022, vol. 1, issue 2, 8-14

Abstract: This study simultaneously tests Wagner’s law on one hand and Keynes proposition on the other hand related both government spending and output in Ivory Coast that experiencing long run economic growth and widened deficit. That challenges the country’s fiscal sustainability. With annual data from 1980 to 2020, results show that Wagner’s law holds, the elasticity of government spending to output is greater than one. There is bidirectional causality between government size and output validating Keynesian idea that public expenditure is an exogenous factor and a policy instrument for increasing national income. Wagner law and public deficit can justify Ivorian over-indebtedness.

Keywords: Government spending; GDP growth; Wagner law; Causality (search for similar items in EconPapers)
Date: 2022
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