Assessing the multiplier effect of government spending: A methodological approach and empirical analysis

One of the indicators of the public administration quality at the macroeconomic level is the multiplier that reflects the impact of government spending on national economic growth. The purpose of the article is to formulate a comprehensive methodological approach to assessing the multiplier effect of government spending in the context of the Russian economy. Methodologically, the research rests on economic theory, public administration theory, the provisions of Keynesian theory and the concept of multiplier. A large dataset of statistical and calculated indicators drawn from publicly available sources was constructed for empirical analysis, encompassing the period of 2005–2024. Employing regression and factor analysis methods allowed for an integrated evaluation of the multiplier effect of government spending on the country’s GDP. Our analysis confirms a statistically significant impact and a positive multiplier effect resulting from the increase in government spending. The multiplier values calculated using different methods demonstrated consistent results. The hypothesis on the crowding-out effect of government spending on private sector investments was rejected. During the periods of economic expansion, government spending promoted final consumption and investment activity in the non-government sector, while in times of recession it offset their decline. The proposed approach can be utilized by government authorities in preparing strategic documents and introducing measures of economic development at various levels of executive power.