Abstract
The study here was meant to examine the consequence of Ghana’s government spending on economic growth, internal migration and poverty reduction in Ghana using a disaggregated approach. It reveals that intensifying government outflow has not yielded any meaningful development in Ghana. Many researches had been conducted on the actual link connecting government expenditure, internal migration, economic growth and poverty reduction. Many of the studies until today have used the aggregate approach which has not yielded the desired results hence there is the need to vary the methodology. This study made use of the data for the period (1980 - 2012). The findings from the study shows that Government total capital expenses (GTE), total recurrent outflows (GOF), Government cost on education (GCE) and power (POW) on the contrary, impacts negatively on economic growth and was significant. On the other hand, increasing Government spending on transport and communication (GCTC), and health (GDH) leads to an increase in economic growth. From the results above, the authors advised that there should be public private participation in critical sectors of the Ghanaian economy in the areas of power and transport in order to accelerate the rate of development in Ghana. In addition to this recommendation, government should be more transparent and accountable in her spending.
Highlights
There is a serious argument among scholars around the world about the relationship between government spending, internal migration and its influence on economic growth
The results showed that only health (GEH) and transport and communication (GETC) were correctly signed in support of the prior expectation, the other explanatory variables were negatively signed against a priori expectation
The results showed that 1 percentage increase in total capital expenditure in the previous two years causes economic growth to decline by 0.004 percentages
Summary
There is a serious argument among scholars around the world about the relationship between government spending, internal migration and its influence on economic growth. The protection function consists of the maintenance of rule of law and the enforcement of property rights. These have the potential to reduce the risks of criminality; protect life, property, and defend the nation from foreign attacks. The provisions of public goods such as defense, roads, education, health, and power, to mention a few are very important for any nation’s development. Development specialists are of the view that if government spending on socio-economic and physical infrastructure across the country increases, it will encourage economic growth; reduce internal migration, and reduce (add) poverty. Expenditure on infrastructure such as roads, communications, power, etc, reduces production costs, increases private sector investment and profitability of firms, nurturing economic growth. Low educational attainment is known to be a major factor underlying the exclusion of the poor from the opportunities that come with economic growth ( Awuse et al 2014) Ravallion and Datt, 2003)
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