Abstract
This paper examines the relationship between public expenditure and economic growth in Nigeria during the period 1970-2009. A disaggregated public expenditure level was employed using the Gregory-Hansen structural breaks cointegration technique. The result confirms Wagner’s law in two models in the long run; there was a break in 1993 in which the political crisis that engulfed the nation was accountable. The result also shows that economic growth and development are the main objectives of government expenditure, especially investment in infrastructure and human resources all of which falls under social and community services. Based on the result, there should be efforts to maintain adequate levels of investment in social and economic infrastructure. Key words: Public expenditure, economic growth, structural breaks, cointegration.  
Highlights
The relationship between public expenditure and economic growth has been extensively treated in the theoretical and empirical literature
One is that public expenditure is a consequence of economic growth as posited by Wagner (1883) and the other is by Keynes (1936) who stated that public expenditure is a tool adopted by the government to reverse economic downturns by borrowing money from the private sector and returning it to them through various spending programmes, economic growth is an outcome of public expenditure
Devarajan et al (2006) studied the relationship between the composition of government expenditure and economic growth for a group of developing countries the result show that capital expenditure has a significant negative association with growth of real GDP per capita and recurrent expenditure is positively related to real GDP per capita
Summary
This paper examines the relationship between public expenditure and economic growth in Nigeria during the period 1970-2009. A disaggregated public expenditure level was employed using the Gregory-Hansen structural breaks cointegration technique. The result confirms Wagner’s law in two models in the long run; there was a break in 1993 in which the political crisis that engulfed the nation was accountable. The result shows that economic growth and development are the main objectives of government expenditure, especially investment in infrastructure and human resources all of which falls under social and community services. There should be efforts to maintain adequate levels of investment in social and economic infrastructure
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