IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/99425.html
   My bibliography  Save this paper

Public Spending and Economic Welfare in ECOWAS Countries: Does Level of Development Matter?

Author

Listed:
  • Alimi, R. Santos

Abstract

Conflicting views on the sign of the relationship between government size and economic development have resulted into the testing of non-monotonic relationship in the literature. Therefore, the total effect of growing public spending on economic development is ambiguous. This study investigated how government size affect economic development and determine the optimal government size that promotes economic development in ECOWAS countries. The study employed secondary data covering the period 1986 to 2018. Data on Gross Domestic Product per capita, government size, population growth rate, inflation rate, gross fixed capital formation and financial development variables were sourced from World Development indicator database. The study constructed social welfare function as development indicator. Data were analysed using Least Absolute Deviation (LAD) regression and quantile regression (QR). The findings showed that quantile regression estimates are negative and significant (p

Suggested Citation

  • Alimi, R. Santos, 2020. "Public Spending and Economic Welfare in ECOWAS Countries: Does Level of Development Matter?," MPRA Paper 99425, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:99425
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/99425/1/MPRA_paper_99425.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sefa Awaworyi Churchill & Mehmet Ugur & Siew Ling Yew, 2017. "Does Government Size Affect Per-Capita Income Growth? A Hierarchical Meta-Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 142-171, March.
    2. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    3. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    4. Maddala, G S & Wu, Shaowen, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
    5. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.),Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084, Central Bank of Chile.
    6. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    7. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    8. Folster, Stefan & Henrekson, Magnus, 2001. "Growth effects of government expenditure and taxation in rich countries," European Economic Review, Elsevier, vol. 45(8), pages 1501-1520, August.
    9. Davies, Antony, 2009. "Human development and the optimal size of government," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(2), pages 326-330, March.
    10. Susana Martins & Francisco Veiga, 2014. "Government size, composition of public expenditure, and economic development," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 578-597, August.
    11. Kaushik Basu & Joseph E. Stiglitz, 2016. "Inequality and Growth," World Bank Publications - Books, The World Bank Group, number 24983, December.
    12. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    13. M. I. Ansari & D. V. Gordon & C. Akuamoah, 1997. "Keynes versus Wagner: public expenditure and national income for three African countries," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 543-550.
    14. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    15. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    16. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gilbert Nartea & Jacqueline Hernandez, 2020. "Government Size, the Composition of Public Spending and Economic Growth in Netherland," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 9(2), pages 82-89.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alimi, R. Santos, 2018. "Growth effect of government expenditures in West African countries: A nonlinear framework," MPRA Paper 99108, University Library of Munich, Germany, revised Mar 2019.
    2. Yongfu Huang, 2011. "Private investment and financial development in a globalized world," Empirical Economics, Springer, vol. 41(1), pages 43-56, August.
    3. Hajamini, Mehdi & Falahi, Mohammad Ali, 2018. "Economic growth and government size in developed European countries: A panel threshold approach," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 1-13.
    4. Trofimov, Ivan D., 2020. "The optimum size of public education spending: panel data evidence," MPRA Paper 106847, University Library of Munich, Germany.
    5. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    6. Markus Eberhardt & Francis Teal, 2008. "Modeling Technology and Technological Change in Manufacturing: How do Countries Differ?," CSAE Working Paper Series 2008-12, Centre for the Study of African Economies, University of Oxford.
    7. Alessio Ciarlone, 2019. "The relationship between financial development and growth: the case of emerging Europe," Questioni di Economia e Finanza (Occasional Papers) 521, Bank of Italy, Economic Research and International Relations Area.
    8. Krishna Murari, 2017. "Financial Development–Economic Growth Nexus: Evidence from South Asian Middle-income Countries," Global Business Review, International Management Institute, vol. 18(4), pages 924-935, August.
    9. Jacobo Campo & Henry Mendoza, 2018. "Public expenditure and economic growth: a regional analysis for Colombia, 1984-2012," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 88, pages 77-108, Enero - J.
    10. Roberto Basile & Mauro Costantini & Sergio Destefanis, 2005. "Unit root and cointegration tests for cross-sectionally correlated panels. Estimating regional production functions," CELPE Discussion Papers 94, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    11. Hyunjoo Kim Karlsson & Kristofer Månsson & Scott Hacker, 2021. "Revisiting the nexus of the financial development and economic development: new international evidence using a wavelet approach," Empirical Economics, Springer, vol. 60(5), pages 2323-2350, May.
    12. Diego Romero‐Avila, 2006. "Fiscal Policies And Output In The Long Run: A Panel Cointegration Approach Applied To The Oecd," Manchester School, University of Manchester, vol. 74(3), pages 360-388, June.
    13. Hiroyuki Taguchi & Ni Lar & Sereyvuth Ky, 2021. "Revisiting the effects of demographic dynamics on economic growth in Asia: a panel vector‐autoregressive approach with a saving channel," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 35(2), pages 77-94, November.
    14. Charalampos Agiropoulos & Michael L. Polemis & Michael Siopsis & Sotiris Karkalakos, 2022. "Revisiting the finance‐growth nexus: A socioeconomic approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 2762-2783, July.
    15. Rudra P. Pradhan & Mak B. Arvin & Sara E. Bennett & Mahendhiran Nair & John H. Hall, 2016. "Bond Market Development, Economic Growth and Other Macroeconomic Determinants: Panel VAR Evidence," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 23(2), pages 175-201, June.
    16. Fromentin, Vincent, 2017. "The long-run and short-run impacts of remittances on financial development in developing countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 192-201.
    17. Edoardo Gaffeo & Petya Garalova, 2014. "On the finance-growth nexus: additional evidence from Central and Eastern Europe countries," Economic Change and Restructuring, Springer, vol. 47(2), pages 89-115, May.
    18. Igor Kotlán & Zuzana Machová, 2014. "Horizont daňové politiky v zemích OECD [Tax Policy Horizon in the OECD Countries]," Politická ekonomie, Prague University of Economics and Business, vol. 2014(2), pages 161-173.
    19. Campo, Jacobo & Mendoza, Henry, 2018. "Gasto público y crecimiento económico: un análisis regional para Colombia, 1984-2012," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 88, pages 77-108, January.
    20. Rudra P. Pradhan & Mak B. Arvin & Sahar Bahmani & Sara E. Bennett & John H. Hall, 2017. "Insurance–growth nexus and macroeconomic determinants: evidence from middle-income countries," Empirical Economics, Springer, vol. 52(4), pages 1337-1366, June.

    More about this item

    Keywords

    Quantile regression; public spending; ECOWAS;
    All these keywords.

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:99425. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.