Government Revenue Expenditure Research Articles

Fiscal Policy and Unemployment Nexus in Nigeria: An Empirical Analysis (1990–2021)

ABSTRACT: This study assessed the fiscal policy and unemployment nexus in Nigeria using time series data covering 1990 to 2021. Economic downturn, poor living standard, inadequate employment generation and increasing unemployment rate are sources of concern and worry. Job creation seems not to be getting the needed attention in the scheme of economic policies in Nigeria. The proxies for fiscal policy were: government capital expenditure (GCE), government revenue expenditure (GRE), government external debt (GED) and government total revenue (GTR), while that for unemployment was the unemployment rate. Specifically, this sought to examine the nexus between GCE and unemployment rate, GRE and unemployment rate, GED and unemployment rate, and GTR and unemployment rate. The ex-post-facto research design was used while the hypotheses were tested at 5% significance level. The time series data obtained from the Central Bank of Nigeria statistical bulletin was analyzed using the OLS technique. The test results showed that: GCE had a coefficient of 3.84 and a probability of 0.9893; GRE had -0.000481 coefficient and a probability of 0.6365; GED had 0.000584 coefficient and a probability of 0.1292 while GTR had 0.002070 coefficient and a probability of 0.0000. The probability f-statistic value of 0.000000 showed that proxies for fiscal policy are jointly significant to the unemployment rate. The adjusted R2 and Durbin-Watson values were 86% and 1.798125 respectively. It was recommended that the federal government should: (1) apply her capital expenditure properly and direct it to sectors that will help create more jobs and reduce unemployment rate, (2) make her recurrent expenditure to be supportive of the various government infrastructures, (3) drastically reduce her growing and high debt profile without commensurate job opportunities, (4) use her revenue to drive the economy instead of being applied on non-productive, white elephant projects or misappropriated.

The Government Revenue–Expenditure Nexus in Southeast Europe: A Bootstrap Panel Granger-Causality Approach

ABSTRACT This article presents one of the first attempts to explore the relationship between government revenues and government expenditures in six Southeast European countries for the period 1999–2015, employing a bootstrap panel Granger-causality approach, which provides insight into the nature and direction of their relationship in each country. The empirical results indicate a unidirectional relationship from government revenues to government expenditures in five countries (Albania, Bulgaria, Croatia, Serbia, and Slovenia), confirming the revenue-expenditure or tax-spend hypothesis. The findings offer support for the fiscal synchronization hypothesis only in Macedonia, where bidirectional causality between government revenues and government expenditures was found.

Revisiting the Government Revenue-Expenditure Nexus: Evidence from Nigeria Based on the VAR Granger Causality Approach

The relationship between government revenue and government expenditure is important, given its relevance for policy especially with respect to the budget deficit. The purpose of this study is to examine the structure of federal government revenue and expenditure in Nigeria, from 1961-2010. It investigates the causal relationship between government revenue and government expenditure, using Granger causality test through cointegrated vector autoregression (VAR) methods; so as to determine whether the tax-spend hypothesis, spend-tax hypothesis, fiscal synchronization hypothesis, or the fiscal neutrality hypothesis hold in the relationship between government revenue and expenditure for Nigeria. The result shows that there is a bi-directional causality between government revenue and government expenditure. The outcome of the bi-directional causality between government revenue and expenditure supports the fiscal synchronization hypothesis. This therefore, suggest that the federal government should not make spending-tax decisions in isolation of tax-spend decisions. This is because the joint determination of revenues and expenditures is appealing as long as it effectively restrains the budget deficit. Therefore, efforts at enhancing sources of revenue should be accompanied by reductions in government spending for Nigeria.

The Government Revenue-Expenditure Nexus: Evidence from a State

In this article, we empirically gauge the government revenue-expenditure nexus for a state. Employing Granger-causality and vector autoregression techniques, our stylized results indicate that state revenues cause state expenditures. Furthermore, we find that federal grants are not a significant perma nent source of exogenous shock.