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Modelling Government Expenditure-Poverty Nexus for Ghana

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  • Nyarkoh, James Bright

Abstract

The paper examines the effect of government expenditure on poverty incidence for Ghana during the period 1960 to 2013. Using the Johansen test (JH), Vector Error Correction (VECM) test, and the Ordinary Least Square (OLS), it is found that poverty incidence positively correlated with government expenditure. The implication of the finding is that poverty is not reducing with increase in government expenditure. Future studies should consider the issues of causality and structural break as well as panel study.

Suggested Citation

  • Nyarkoh, James Bright, 2016. "Modelling Government Expenditure-Poverty Nexus for Ghana," MPRA Paper 75727, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75727
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    File URL: https://mpra.ub.uni-muenchen.de/75727/1/MPRA_paper_75727.pdf
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    References listed on IDEAS

    as
    1. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237, December.
    2. Charles Meth, 2006. "What was the poverty headcount in 2004 and how does it compare to recent estimates by van der Berg et al?," SALDRU Working Papers 1, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    4. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2000. "Growth and poverty in rural China: the role of public investments," EPTD discussion papers 66, International Food Policy Research Institute (IFPRI).
    5. Shenggen Fan & Bingxin Yu & Somchai Jitsuchon, 2008. "Does Allocation of Public Spending Matter in Poverty Reduction? Evidence from Thailand," Asian Economic Journal, East Asian Economic Association, vol. 22(4), pages 411-430, December.
    6. Arsenio Balisacan & Ernesto Pernia & Abuzar Asra, 2003. "Revisiting growth and poverty reduction in Indonesia: what do subnational data show?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(3), pages 329-351.
    7. Marisa Hidalgo Hidalgo & Iñigo Iturbe-Ormaetxe Kortajarene, 2014. "Long-run effects on poverty of public expenditure in education," Working Papers. Serie AD 2014-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Hicham AYAD, 2019. "Co-integration with regime shift between government expenditure and poverty reduction in Algeria," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(619), S), pages 205-216, Summer.

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    More about this item

    Keywords

    Poverty incidence; government spending; Income;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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