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The Impact of Public Expenditure on Economic Growth of Kosovo

Author

Listed:
  • Driton Balaj

    (University of Prishtina)

  • Lirim Lani

    (College Dukagjini)

Abstract

The aim of the paper is to identify the impact of public expenditure on economic growth of Kosovo over the period 2000-2016. The structure of the econometric model is built by two economic theories, Wagner and Keynesian, where these two economic concepts support the results of the paper, that public expenditure and economic growth have a positive relation, but public expenditure does not have a direct impact on economic growth, but can have a stimulate effect on the economic growth process. The results of the econometric model showed that none of the public expenditure categories in Kosovo had any impact on economic growth of Kosovo over the period 2000-2016. The general conclusion is that public expenditure in Kosovo has been characterized by an unproductive public expedition, for the period 2000-2016, the effect of public expenditure on economic growth has not had the necessary and reasonable impact on achieving the economic target in Kosovo. The findings of the paper can be used by Kosovo's own government to orient the fiscal policies in Kosovo. The study seeks to contribute to the provision of an effective public expenditure structure in Kosovo, with particular emphasis on the best categorization of their impact on Kosovo's economic growth.

Suggested Citation

  • Driton Balaj & Lirim Lani, 2017. "The Impact of Public Expenditure on Economic Growth of Kosovo," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(5), pages 401-412, OCTOBER.
    • Handle: RePEc:dug:actaec:y:2017:i:5:p:401-412
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/4443/4254
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    References listed on IDEAS

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    1. A. F. Al-Faris, 2002. "Public expenditure and economic growth in the Gulf Cooperation Council countries," Applied Economics, Taylor & Francis Journals, vol. 34(9), pages 1187-1193.
    2. Tajudeen Egbetunde Ismail O. Fasanya, 2013. "Public Expenditure and Economic Growth in Nigeria: Evidence from Auto-Regressive Distributed Lag Specification," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 16(1), pages 79-92, May.
    3. Manh Vu Le & Terukazu Suruga, 2005. "Foreign direct investment, public expenditure and economic growth: the empirical evidence for the period 1970-2001," Applied Economics Letters, Taylor & Francis Journals, vol. 12(1), pages 45-49.
    4. Ventelou, Bruno & Bry, Xavier, 2006. "The role of public spending in economic growth: Envelopment methods," Journal of Policy Modeling, Elsevier, vol. 28(4), pages 403-413, May.
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    Cited by:

    1. Zharku Lutfi, 2018. "(Un)Productive Use of Public Debt in Kosovo," Ekonomika (Economics), Sciendo, vol. 97(2), pages 18-37, December.
    2. Mubanga Mpundu & Jane Mwafulirwa & Mutinta Chaampita & Notulu Salwindi, 2019. "Effects of Public Expenditure on Gross Domestic Product in Zambia from 1980-2017: An ARDL Methodology Approach," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 103-111.
    3. Guilherme Correa Petry & Ely José Mattos, 2023. "The Effects of Public Expenditure on Municipal Development: A Dynamic Panel Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(2), pages 695-714, January.

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