Government Recurrent Expenditure Research Articles

Analysis of Fiscal and Monetary Policies on Economic Growth: Evidence from Nigerian Democracy

The research deals with analysis of Nigeria democracy and its impact on fiscal and monetary policies. Secondary data from Central Bank of Nigeria (CBN) was mainly used for this study. The study adopted descriptive statistics, regression and correlation analysis on fiscal and monetary variables (i.e., inflation, interest rate, narrow money, broad money, government recurrent and capital expenditure). The objectives of the study are to describe the trend of policy variables; examine the impact of fiscal and monetary instruments on economic growth (i.e, Real Gross Domestic Product (RGDP) as proxy for economic growth) and to make recommendations based on the research findings. The results revealed that there has been fluctuation in the trend of policy variables in Nigeria (i.e., inflation rate, interest rate, narrow money, broad money, government re-current and capital expenditure) considered with reference to the stable democracy in Nigeria between 1999-2008. The results also show that 96.3% of the variation (model 1) has been explained by the explanatory variables, 98.1% of the variation in dependent variable (model 2) has been explained by the explanatory variable, 99.4% of the total variation in dependent variable has been explained by the explanatory variables (model 3) and 85.7% of the variation in dependent variable (model 4) has been explained by the explanatory variables. The results further showed that broad money and re-current expenditure have positive relationship with RGDP which shows that a unit increase in the aforementioned variables will lead to a unit increase in GDP, but re-current expenditure is 5% significant with broad money having no significant level. Narrow money, inflation, interest rate and capital expenditure have negative impact on GDP, though; interest rate is significant at 10% probability level. The correlation results further showed that narrow money, broad money and government recurrent expenditure are significant at 1% probability level while government capital expenditure is significant at 5% probability level with inflation and interest rate having no significant relationship and negatively related with RGDP. The study concluded that narrow money, broad money, government recurrent expenditure and capital expenditure are significant variables that affect economic growth in Nigeria.

MOBILIZATION OF DOMESTIC FINANCIAL RESOURCES FOR AGRICULTURAL PRODUCTIVITY IN NIGERIA

The paper examines the mobilization of domestic financial resources for agricultural productivity in Nigeria with a view to identify the contributions of the various sources of finance to agricultural productivity in Nigeria. To achieve this objective, the paper employed Vector Auto Regressive Model (VAR) to analyze time series data from (1980 – 2009). The paper identified the various instruments and strategies used by the government for mobilizing resources for the agricultural sector in Nigeria to include subsidy and agricultural credit policies that were financed through Nigerian Agricultural Credit Bank (NACB), credit facilities from Nigerian Bank for Commerce and Industries at the state level, credit through Commercial and Merchant Banks and provision of agricultural credit to the defunct Commodity Board by the Central Bank of Nigeria. The OLS (VAR) result revealed positive relationships between the variables and the variance decomposition measured the proportion of forecast error. The paper therefore recommend that the Federal government recurrent expenditure on agriculture should be reviewed upward for enhanced agricultural productivity and that both the Federal government and the Commercial Banks should mobilize more financial resources toward the agricultural sector to boost agricultural productivity which would guaranteed maximum agricultural productivity in Nigeria.

Government Expenditure on Human Capital Development: Implications for Economic Growth in Nigeria

This study examines the relationship between human capital development efforts of the Government and economic growth in Nigeria. It seeks to find out the impact of government recurrent and capital expenditures on education and health in Nigeria and their effect on economic growth. The data used for the study are from secondary sources while the augmented Solow model was also adopted. The dependent variable in the model is the level of real output while the explanatory variables are government capital and recurrent expenditures on education and health, gross fixed capital formation and the labour force. The result shows that there exists a positive relationship between government recurrent expenditure on human capital development and the level of real output, while capital expenditure is negatively related to the level of real output. The study recommends appropriate channeling of the nation’s capital expenditure on education and health to promote economic growth.

Fiscal policy, private investment and economic growth: the case of Ghana

PurposeThis paper aims to examine the relationships between disaggregated government fiscal policy variables; private capital investment and economic growth in Ghana, as well as the similarities and differences in the impact of these variables on private investment (PI) and economic growth.Design/methodology/approachCointegration and an error‐correction models are used, with time series properties of the variables investigate using augmented Dickey‐Fuller test and cointegration of the variables tested using Engel‐Granger two step procedure.FindingsThe findings indicate that changes in government recurrent expenditure, current government capital expenditure and international trade taxes are significant for growth while changes in tax on domestic goods and services, tax on international trade and tax on income and property matter for private capital investment. The major difference between the impact of fiscal policy on PI and economic growth, however, lies in the direction of impact.Practical implicationsBased on the findings of this study, it is recommended that different policies be pursued in the promotion of PI and economic growth. Also, given the low correlation between PI and economic growth, it is recommended that the Ghanaian private sector be focused on and fully developed in order for it to perform its role as an engine of growth.Originality/valueGrowth has been shown to be influenced by government expenditure and international trade taxes while private capital investment is influenced by taxes on domestic goods and services, international trade and on income and property. Fiscal policy authorities will find these useful.

An Assessment of the Impact of Participatory Irrigation Management in Sri Lanka

This paper presents the results of a study on the effects of participatory irrigation management in Sri Lanka. The study is based on the application of a methodology developed by the International Water Management Institute (IWMI) to assess the impact of irrigation management transfer on the performance of irrigated agriculture. Performance is measured from several perspectives: financial, irrigation management, and agricultural productivity levels. Piecewise linear regression models are fitted to compare trends in performance during the five-year period before transfer and five years after. The results show that there has been a significant drop in government's recurrent expenditure for irrigation over time. The decline is not confined to schemes where participatory management had been introduced but to other schemes as well. The cost of irrigation to farmers has remained the same before and after transfer. The analysis reveals that irrigation management transfer alone did not bring about significant improvements in the quality of irrigation or agricultural productivity levels. However, in schemes where both management transfer and physical rehabilitation had occurred, significant improvements in agricultural productivity were noted.

Government recurrent expenditure and economic growth in less developed countries

There is not much support in less developed countries for the hypothesis that recurrent government expenditure is seen as consumption and hence more dispensable than capital expenditure. There is little evidence of a secular decline in recurrent expenditure for a group of 54 less developed countries over the period 1965–1973, nor is there strong evidence of greater instability in recurrent expenditure.