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A Bayesian analysis of government expenditure in Nigeria

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  • Olayeni, Olaolu Richard

Abstract

This paper examines the productivity of government expenditure. It adopts a Barro-type production function to chart out a growth model that accounts for the productivity of government spending and also adopts Wagner’s hypothesis to account for endogeneity resulting from fiscal expansion. The model is estimated via the Bayesian technique using the data on Nigeria. The result shows that government expenditure was unproductive in Nigeria and that this conclusion is independent of the macroeconomic environment. Neither is it dependent on the external circumstances. The paper concludes that there is need for urgent budgetary evaluation and close monitoring of the government budget in Nigeria.

Suggested Citation

  • Olayeni, Olaolu Richard, 2009. "A Bayesian analysis of government expenditure in Nigeria," MPRA Paper 18244, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18244
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    References listed on IDEAS

    as
    1. Sugata Ghosh & Andros Gregoriou, 2008. "The composition of government spending and growth: is current or capital spending better?," Oxford Economic Papers, Oxford University Press, vol. 60(3), pages 484-516, July.
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    6. Robert J. Barro & Xavier Sala-I-Martin, 1992. "Public Finance in Models of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 645-661.
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    More about this item

    Keywords

    Bayesian analysis; Government expenditure; Wagner’s hypothesis; Nigeria;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

    NEP fields

    This paper has been announced in the following NEP Reports:

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