Public expenditure and optimal size of state In Cameroon from 1982 To 2023: the Armey Curve

Joseph Nloga Etoundi

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this article is to determine the optimal threshold of public expenditure or optimal size of the State, necessary for economic growth in Cameroon over the period 1982 to 2023. The hypotheses on the conditionality of the optimal allocation of said expenditure at a threshold, and on the presence of a non-linear relationship between the macroeconomic variables of the study, were issued. It is indeed a quadratic relationship whose estimation is based on the calculation of a critical threshold, and the analysis in this case leads on using the method of Vedder and Gallaway (1998), also known as the Armey curve. Its main result is that total public expenditure in Cameroon since 2008 is above the optimal threshold of 16% of GDP, for which the effects would be beneficial on growth. The study recommends reducing public expenditure in non-growth sectors and channeling it to infrastructure investments capable of inducing private investment.

Keywords: Public expenditure; optimal size; Armey curve; growth. (search for similar items in EconPapers)
JEL-codes: C22 H50 (search for similar items in EconPapers)
Date: 2024-09-17
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Published in International Journal of Humanities Social Science and Management 5.4(2024): pp. 216-226

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