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The Main Determinants of the Government Expenditure: A Case Study of Côte D’ivoire

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  • Mohsen Adel Shakeeb

    (Lecturer, Graduate School of Management (GSM), Abidjan, Cote d’Ivoire)

Abstract

Based on the importance of government expenditure in supporting economic growth in the country, the main objective of this study is to investigate the determinants of government expenditure in Cote d’Ivoire over the period 1980-2020. To achieve the objective, this study examines the effect of external debt, national income, inflation, and population on government expenditure, by using the ADF unit root test, Johansen cointegration test, Granger causality test, and CUSUM test. Results from the Johansen cointegration test indicated that there are long-run relationships among the variables. Government expenditure is positively related to external debt, national income, and population, but it is negatively related to inflation. The population has the biggest effect on government expenditure. The Granger causality test shows that there is a unidirectional short-run causality relationship running from external debt to government expenditure, but there is no evidence of any short-run causality relationship between national income, inflation, population, and government expenditure. On the other hand, there are bidirectional long-run causality relationships between inflation, population, and government expenditure, and unidirectional long-run causality relationships running from external debt and national income to government expenditure in Côte d’Ivoire. Lastly, the CUSUM test indicated that there are no structural changes in the model. The study recommends that the government should use government expenditure more efficiently in improving the infrastructure and creating an attractive investment climate, as well as upgrading the quality of human capital by improving the education system, health services, and the standard of living.

Suggested Citation

  • Mohsen Adel Shakeeb, 2022. "The Main Determinants of the Government Expenditure: A Case Study of Côte D’ivoire," Timisoara Journal of Economics and Business, Sciendo, vol. 15(2), pages 151-166.
    • Handle: RePEc:vrs:timjeb:v:15:y:2022:i:2:p:151-166:n:1002
    DOI: 10.2478/tjeb-2022-0009
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    References listed on IDEAS

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    More about this item

    Keywords

    Cote d’Ivoire; Ivory Coast; government expenditure; VAR;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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