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Economic Growth and Infrastructure Expenditure in Kenya: A Granger-Causality Approach

Author

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  • Samuel Chingoiro
  • Strike Mbulawa

Abstract

The President of Kenya, in January 2014, announced that infrastructure development would be used as the major drive to achieve economic growth during the tenure of his presidency. A notable part of the statement by the President is the requirement that the policy would involve very significant public expenditure on infrastructure. In that context, this study undertook a causality analysis between infrastructure expenditure and economic growth and labor was introduced into the framework as a control variable. The study also undertook to establish if innovations in one variable would influence the future behavior of another. Annual data used in this study was obtained from World Development Indicators for the period 1980 to 2013. Using Granger Causality approach the study reveals that: there is bidirectional flow of causality between economic growth and infrastructure, shocks in economic growth explained the behavior of infrastructure even beyond eight years, and that infrastructure expenditure is explained by innovations in the previous period. The findings suggest that the government should commit more funds towards developing infrastructure in the short term. This should be complemented by improving the quality of institutions and an improvement in the level of regulation to enhance sustainable growth.

Suggested Citation

  • Samuel Chingoiro & Strike Mbulawa, 2016. "Economic Growth and Infrastructure Expenditure in Kenya: A Granger-Causality Approach," International Journal of Social Science Studies, Redfame publishing, vol. 4(9), pages 1-8, September.
    • Handle: RePEc:rfa:journl:v:4:y:2016:i:9:p:1-8
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    Citations

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    Cited by:

    1. Ademola E. Ojo & Ditimi Amassoma, 2021. "Infrastructures Development, Environmental Quality and Economic Growth in Nigeria," Journal of Infrastructure Development, India Development Foundation, vol. 13(2), pages 129-144, December.
    2. 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.
    3. Andrés Rodríguez-Pose & Callum Wilkie, 2018. "Strategies of gain and strategies of waste: What determines the success of development intervention?," Papers in Evolutionary Economic Geography (PEEG) 1826, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2018.
    4. Rimsha Irshad & Mehr-un-Nisa & Naghmana Ghafoor, 2023. "Infrastructure and Economic Growth: Evidence from Lower Middle-Income Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 161-179, March.
    5. Strike Mbulawa, 2017. "The Impact Of Economic Infrastructure On Long Term Economic Growth In Botswana," Journal of Smart Economic Growth, , vol. 2(1), pages 15-33, March.

    More about this item

    Keywords

    Economic Growth; Infrastructure; Kenya; Causality;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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