The Growth of Government Spending in Lesotho

Retselisitsoe Thamae

Economic Analysis and Policy, 2013, vol. 43, issue 3, 339-352

Abstract: The paper analyses the dynamics of government spending growth in Lesotho using the multivariate cointegration techniques for the period 1980-2010. The results indicate that government spending is positively related to income and population while negatively related to tax share in the long-run. The latter supports the idea of fiscal illusion caused by budget deficits, which lessen the perceived cost of public spending to taxpayers. The role of internal and external shocks on government spending is also investigated in this study but such factors are found to be less important in determining the growth of government expenditure in Lesotho.

Keywords: Government spending; fiscal illusion; cointegration; error correction; Lesotho (search for similar items in EconPapers)
JEL-codes: C22 H50 H60 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:43:y:2013:i:3:p:339-352

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