An empirical analysis of disaggregated government expenditure and economic growth in South Africa
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Authors
Leshoro, Temitope L A
Issue Date
2017-05
Type
Working Paper
Language
en
Keywords
ARDL, consumption, economic growth, government spending, investment.
Alternative Title
Abstract
The motivation for this study stems from the weak economic growth that the country has been
experiencing lately, coupled with the concern over government spending in South Africa. Estimating
only the effect of government spending on economic growth is not enough; the different components
of government spending should also be investigated in order to observe their relationships with
economic growth. Earlier studies in South Africa considered the effects of total government spending
on economic growth. This is the first study to our knowledge that disaggregated government spending
into government investment spending and government consumption spending. This study, therefore,
examines the effects of government investment expenditure and government consumption expenditure
along with groups of control variables on economic growth in South Africa, using the autoregressive
distributed lag (ARDL) technique. Annual data spanning the period 1976 to 2015 was employed. The
results show that the disaggregated government spending is positively related to economic growth
both in the long run and the short run, during the period considered
Description
An empirical analysis of disaggregated government expenditure and economic growth in South Africa