The Impact of Financing Instruments in the Evolution of the Productive Structure of Total Public Expenditure in Jordan during 1980-2013

Abstract

This study aims to analyze the evolution of the productive structure of public spending in Jordan and the role of some of the financing instruments to influence them based on annual data for public spending and structure of the production of current and investment expenditures of public variables are supported and a number of independent variables of (local revenue, foreign aid, foreign loans, loans interior, foreign direct investment) and a series of time stretching from 1980 until 2013, the study results indicates that the current spending ratio occupied two-thirds of total public expenditure in the eighties, while investment spending accounted for only one-third , And then taken the current spending rate of an upward trend to reach more than three-quarters of the total public expenditure in the 1990s and the beginning of the third millennium of the twenty-first century, while the proportion of investment spending less than a quarter during the same period, the results of the unit root test showed that all variables stabilized at the first difference. After the Johansen test of Co-integration, it was found that there is a long-term equilibrium relationship between the variables within the model and the Granger's causality test that there is a causal relationship and one direction between external loans with total public expenditure (domestic revenues and external loans with public investment expenditure) and (current spending with internal loans . In addition, domestic revenues, foreign aid, external loans, internal loans, foreign direct investment (FDI) had a positive effect on (total public expenditure, public investment expenditure, public current expenditure), Excluding external loans had a negative impact on current public spending , and by a significant value (T) it was found that domestic revenues played a large role in determining the level of total public spending and public investment expenditure, while internal loans played a large role in determining the level of public current expenditure