A quantitative assessment of the impact of government activities on the economy of Poland

Abstract

Government interventions and economic activities could have significant impacts on the economies of countries. Effective governance and quality institutions are required for sustainable economic growth in both developed and developing countries. The primary objective of this study was to analyse the impact of government activities on economic growth in Poland. The study followed a quantitative research approach, employing time series data from 1995 to 2017 including GDP as the dependent variable with variables such as government spending and debt, size and effectiveness of government, and the level of corruption as independent variables. The relationships between the variables were analysed by making use of an Auto Regressive Distributed Lag (ARDL) econometric model. The results indicated that there are both long- and short-run relationships between the variables. Other results indicated that government variables included in the study, caused changes in economic growth as assessed via a Granger causality analysis. A number of recommendations were listed which include inter alia, that effective government spending and management have a positive impact on the economy, while efforts to limit the levels of corruption also contributes to economic improvements in a country.