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The Effect of Government Expenditure on Infrastructure on the Growth of the Nigerian Economy, 1977-2009

Author

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  • Mary Modupe Fasoranti

    (Deparment of Economics, Adkunle Ajasin University, Akungba Akoko, Ondo State, Nigeria)

Abstract

The paper examined the effects of government expenditures on infrastructure on the growth of the Nigerian economy. The data sourced majorly from the various issues of Central Bank statistical bulletin was analyzed with the aid of econometric methods. Data collected included government expenditures on education, environment and housing, health services, transport and communication, agriculture, security, inflation rate and gross domestic product. Data treatment methods used was the unit root test, co-integration and vector error correction estimation. Simple multiple regression model was used to obtain the results used for the analysis. Results showed a long run relationship between the growth of the economy and government expenditures in education, environment and housing, health services, water resources, inflation rate, agriculture, security, transport and communication. The paper observed that government expenditures on health services, transport and communication imparted negatively on growth while expenditures in agriculture and security were not significant in the growth of the economy. To increase the growth rate of the economy, the government must adopt stringent controls on its expenditures on infrastructure so as to reduce fraud, fund diversion and mismanagement. Moreover, monitoring and evaluation of government spending must be given top priority. This will help to ensure that the targets of government spending are reached.

Suggested Citation

  • Mary Modupe Fasoranti, 2012. "The Effect of Government Expenditure on Infrastructure on the Growth of the Nigerian Economy, 1977-2009," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 513-518.
  • Handle: RePEc:eco:journ1:2012-04-14
    as

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    References listed on IDEAS

    as
    1. Johan Fourie, 2006. "Economic Infrastructure: A Review Of Definitions, Theory And Empirics," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 530-556, September.
    2. Khalifa Ghali, 1998. "Public investment and private capital formation in a vector error-correction model of growth," Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 837-844.
    3. Landau, Daniel, 1986. "Government and Economic Growth in the Less Developed Countries: An Empirical Study for 1960-1980," Economic Development and Cultural Change, University of Chicago Press, vol. 35(1), pages 35-75, October.
    4. Macdonald, Ryan, 2008. "An Examination of Public Capital's Role in Production," Economic Analysis (EA) Research Paper Series 2008050e, Statistics Canada, Analytical Studies Branch.
    5. Seethepalli, Kalpana & Bramati, Maria Caterina & Veredas, David, 2008. "How relevant is infrastructure to growth in East Asia ?," Policy Research Working Paper Series 4597, The World Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Government expenditures; Infrastructure; Growth; Gross domestic product;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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