Abstract
This study aims to identify the effect of public debt on Palestinian government expenditure from the year 1997-2019. An analytical descriptive approach was used. The study found that the public debt positively impacts government expenditures and current expenditure, this confirms that the largest proportion of public debt is spent on the non-productive consumer aspects without direct concern for the elements of real economic production. In addition, the public debt negatively affects the development expenditures, which are usually supported by foreign aid and grants. Based on previous results, the researcher progress with several recommendations, the most important of which are that the Palestinian Authority should rationalize public and private consumption spending, and encourage citizens to invest by making them aware of the benefits of directing savings towards investment, financing projects. That is to achieve Palestinian priorities and economic development at the national level and within the main directions of the Palestinian Development Plan while increasing the share of development expenditures.
Highlights
After World War II, the countries of the world were divided in terms of the level of economic prosperity, the degree of development and economic growth, the well-being of members of society, the level of employment of manpower, and the per capita gross domestic product into two parts, developed and developing countries, that the economic gap between developing and developed countries began to widen gradually (AlKhasawneh, 2014; Costandi, et al, 2019).The budget deficit problem is considered one of the main financial problems facing the public budgets of many developing countries
Al-Shammari and Kazem (2015) examined the indicators of public debt and the resulting effects in Egypt Where the results summarized the positive effect of the internal debt in strengthening public spending and the increase in the level of domestic credit, which was reflected in the increase in investment rates and the achievement of growth in the domestic product at acceptable rates, which reflects the rationality of using the internal debt
To conclude this, the Palestinian public budget suffers from weakness due to the increase in public expenditure and public debt in addition to the continuous exacerbation of the financial crisis due to the Israeli occupation and its control over the Palestinian natural and economic resources
Summary
The budget deficit problem is considered one of the main financial problems facing the public budgets of many developing countries. Whereas the index of public debt in general and domestic debt in particular is linked to strong and structural relations with the general budget and the rate of deficit in it. The real growth of public spending considers that there is an expansion in the volume of goods and services provided by the state to society or an improvement in the level of existing public services. The real growth of public spending is the monetary expression of that increase in the volume and quality of public services. The increase in the volume of public spending with
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