The Empirical Analysis of the Determinants of Government Expenditure in South Africa from 1970 to 2016

Glenda Maluleke

EuroEconomica, 2018, issue 3(37), 191-201

Abstract: This study empirically examines the determinants of government expenditure in South Africa over the period 1970 to 2016. The study employed the Johansen-Juselius cointegration test and error correction techniques. The results revealed that there is a long-run relationship between government expenditure and its determinants. The study found that urbanization rate, national income, poverty rate and the wage rate significantly influence the size of government expenditure in South Africa. Therefore, the study recommend that government create job opportunities, increase its expenditure in developing rural areas, and find ways to manage the public sector wage bill. The study concludes that population growth, trade openness and inflation, are not important in determining government expenditure in South Africa.

Keywords: wage rate; urbanization; national income; co-integration; error correction model (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:dug:journl:y:2018:i:3:p:191-201

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