Public Spending and Sustainable Human Development in Cameroon: Does corruption matter?

Abstract

This study analyzes the effect of public spending on Human capital on human development in Cameroon by controlling the impact of corruption. After using quantitative methods, the ARDL model was applied with the bounds testing approach with time series data from 2000 to 2021. The results indicated that public spending on education and health positively impacts the change in the human development index. Similarly, economic growth (GDP) positively affects the variation of the human development index. Meanwhile, corruption and foreign direct investment (FDI) negatively correlate with the human development index. However, these results are only valid in the short term. In the long term, there is no relationship between the variables. The government should increase the expenditure budget and expand the target sector to reach the industry needed for human development. An improvement could follow this implementation in transparency in fiscal policy management, which can help reduce the corruption perception index. One of the limitations of this research is the use of a short observation period due to data availability. Therefore, the relationship between public expenditure, corruption, and human development in the CEMAC zone is another critical issue that could be investigated.