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Examining the Fiscal Policy-Poverty Reduction Nexus in Nigeria

Author

Listed:
  • Opasina, Olaolu
  • Owuru, Joel
  • Farayibi, Adesoji

Abstract

Using a multiple regression analysis in the autoregressive distributed lag framework with ECM we include three major components of fiscal policy variables (Government capital expenditure, Government recurrent expenditure and Government Budget Deficit) as regressors and the rate of poverty in Nigeria as the dependent variable, this study explored the potency of fiscal policy in Nigeria in addressing the seemingly endemic poverty scourge from 1980-2011. Findings indicate that the level of government capital expenditures in Nigeria does not reduce the level of poverty in the country over the period of time covered by the study. Although the ECM result, which shows the speed of adjustment of the model from the short run to the long run equilibrium, is on the average, yet the economy did not show any sign of much potency in using the selected fiscal policy variables to tackle the menace of poverty in Nigeria. The study recommends that government should intensify action in implementing effective fiscal policies to ameliorate the level of poverty conditions in Nigeria

Suggested Citation

  • Opasina, Olaolu & Owuru, Joel & Farayibi, Adesoji, 2016. "Examining the Fiscal Policy-Poverty Reduction Nexus in Nigeria," MPRA Paper 90950, University Library of Munich, Germany, revised 27 Dec 2018.
    • Handle: RePEc:pra:mprapa:90950
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal Policy; Poverty Reduction; ECM; SAP; Capital Expenditure; Recurrent Expenditure;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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