Government sectoral spending and human development in Nigeria: Is there a link?

Abstract

The continuous increase in government expenditure in the last three decades without a commensurate improvement in all known indicators of development has generated heated debates among scholars as to the justification for the persistent rise in the annual expenditure of the government. Therefore, this study examined the effects of government sectoral spending on human development in Nigeria using annual data spanning the period 1986–2021. This study contributed to the literature by examining the effects of government sectoral spending on human development using a robust human development index that captures the multifaceted state of economic development in terms of educational attainment, life expectancy and per capita income, unlike previous studies that concentrated on aggregate government spending and used the gross domestic product as an indicator of development. Surprisingly, however, results from the Autoregressive Distributed Lag (ARDL) model employed indicated that both in the short and long run, there is no link between government sectoral spending and human development in Nigeria. Although, outcomes from ECMs suggest that government sectoral spending may affect human development in the long run.