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Abstract
The effect of government expenditure on the standard of living has different impact for various level of economies. In this study, we determined the effect of government recurrent and capital expenditure on the standard of living in Nigeria using a test of causation. The long and short run estimates were done by utilizing an Autoregressive Distributive Lag (ARDL) model using data that spanned from 1981 to 2018. Findings/Originality: Precipitously, we asserted that government recurrent and capital expenditure have a significant effect on the standard of living in Nigeria. Nevertheless, that is not the true reflection of the living standard in the country. There is an enormous need for the government to increase its expenditure on the health sector. Investment in healthcare is positively related to economic growth and has the potential of reducing poverty, hence a better standard of living. The Federal Government of Nigeria ought to, as a matter of direness, prioritize capital expenditure over recurrent expenditure.
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References
- Aggarwal, R. (2017). Growth of public expenditure. Pacific Business Review International, 9(9), 122–128.
- Ahmad, Z., & Batul, T. (2013). Relationship among poverty, education expenditure, and education status: Empirical evidence from Pakistan. In Proceedings of the World Congress on Engineering. London, UK.: World Congress on Engineering.
- Akande, R. (2016). Impact of education on living standard in Nigeria. International Journal of Development and Management Review, 11(1), 215-220–220.
- Alimi, R. S. (2014). A time series and panel analysis of government spending and national income (MPRA Paper No. 56994).
- Alm, J., & Embaye, A. (2011). Explaining the growth of government spending in South Africa (Tulane Economics Working Paper Series No. 1105). Retrieved from http://repec.tulane.edu/RePEc/pdf/tul1105.pdf
- Birowo, T. (2011). Relationship between government expenditure and poverty rate in Indonesia: Comparison of budget classifications before and after budget management reform in 2004. Ritsumeikanasia Pacific University. Retrieved from https://core.ac.uk/reader/60533650
- Churchill, S. A. M., Yew, S. L., & Ugur, M. (2015). Effects of government education and health expenditures on economic growth: A meta-analysis (MPRA Working Paper Series No. 40).
- Cvrlje, D., & Coric, T. (2010). Macro & micro aspects of standard of living and quality of life in a small transition economy: The case of Croatia (Working Paper Series No. 10–02). Zagreb.
- Dahmardeh, N., & Tabar, M. H. (2013). Government expenditures and its impact on poverty Reduction: Empirical from Sistan and Baluchestan Province of Iran. International Journal of Academic Research in Economics and Management Sciences, 2(1), 251–260.
- Dogan, E., & Tang, T. C. (2006). Government expenditure and national income: Causality tests for five South East Asian countries. International Business & Economics Research Journal (IBER), 5(10), 49–58. https://doi.org/10.19030/iber.v5i10.3516
- Gimba, V. K., & Isah, H. A. (2016). Impact of expansionary budget on living standard in Kaduna State, Nigeria (1996 – 2015). Saudi Journal of Business and Management Studies, 1(3), 118–126. https://doi.org/10.21276/sjbms.2016.1.3.7
- Grullion, S. (2012). National income and government spending: Co-integration and causality results for the Dominican Republic. Developing Country Studies, 2(3), 89–98.
- Hidalgo-Hidalgo, M., & Iturbe-Ormaetxe, I. (2018). Long-run effects of public expenditure on poverty. The Journal of Economic Inequality, 16(1), 1–22. https://doi.org/10.1007/s10888-017-9360-z
- Jeff-Anyeneh, S. E. (2018). Effect of government expenditure on economic growth and development in Nigeria. Nnamdi Azikiwe University, Awka.
- Jeff-Anyeneh, S. E., & Ibenta, S. N. (2019). Government expenditure and economic growth: Evidence from the Nigeria economy (1981 – 2016). Advances in Research, 19(4), 1–14. https://doi.org/10.9734/JSRR/2019/v23i630136
- Jha, R., Biswal, U. D., & Biswal, B. P. (2005). An emprical analysis of the impact of public expenditure on education and health on poverty in Indian States (Queen’s Economics Department Working Paper No. 998). Ontario. https://doi.org/10.2139/ssrn.236888
- Kweka, J. P., & Morrissey, O. (2000). Government spending and economic growth in Tanzania, 1965-1996 (CREDIT Research Paper No. 00/6). Nottingham.
- Nduka, J. A., Ananwude, A. C., & Osakwe, C. I. (2019). Expenditure of the federal government of Nigeria: Effect on the standard of living of her citizens. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(4), 57–64. https://doi.org/10.6007/IJARAFMS/v9-i4/6658
- Nwosa, P. I. (2014). Government expenditure, unemployment and poverty rates in Nigeria. Journal of Research in National Development, 12(1), 77–84.
- Nwude, E. C., & Boloupremo, T. (2018). Public expenditure and national income: Time series evidence from Nigeria. International Journal of Economics and Financial Issues, 8(1), 71–76.
- Ogbuagu, A. R., & Ewubare, D. B. (2019). The dynamic correlation between fiscal spending on education, health, consumption and standard of living in Nigeria. International Journal of Economics and Financial Issues, 9(3), 259–267.
- Okafor, C., & Eiya, O. (2011). Determinants of government expenditure in Nigeria: An empirical analysis. Research Journal of Business, 5(1), 44–50. https://doi.org/10.3923/rjbm.2011.44.50
- Tiwari, M. (2012). Rising government expenditure and the status of poor: A study. Shodh Sanchayan, 3(2), 1–8.
- Ukwueze, E. R. (2015). Determinants of the size of public expenditure in Nigeria. SAGE Open, 5(4), 1–8. https://doi.org/10.1177/2158244015621346
References
Aggarwal, R. (2017). Growth of public expenditure. Pacific Business Review International, 9(9), 122–128.
Ahmad, Z., & Batul, T. (2013). Relationship among poverty, education expenditure, and education status: Empirical evidence from Pakistan. In Proceedings of the World Congress on Engineering. London, UK.: World Congress on Engineering.
Akande, R. (2016). Impact of education on living standard in Nigeria. International Journal of Development and Management Review, 11(1), 215-220–220.
Alimi, R. S. (2014). A time series and panel analysis of government spending and national income (MPRA Paper No. 56994).
Alm, J., & Embaye, A. (2011). Explaining the growth of government spending in South Africa (Tulane Economics Working Paper Series No. 1105). Retrieved from http://repec.tulane.edu/RePEc/pdf/tul1105.pdf
Birowo, T. (2011). Relationship between government expenditure and poverty rate in Indonesia: Comparison of budget classifications before and after budget management reform in 2004. Ritsumeikanasia Pacific University. Retrieved from https://core.ac.uk/reader/60533650
Churchill, S. A. M., Yew, S. L., & Ugur, M. (2015). Effects of government education and health expenditures on economic growth: A meta-analysis (MPRA Working Paper Series No. 40).
Cvrlje, D., & Coric, T. (2010). Macro & micro aspects of standard of living and quality of life in a small transition economy: The case of Croatia (Working Paper Series No. 10–02). Zagreb.
Dahmardeh, N., & Tabar, M. H. (2013). Government expenditures and its impact on poverty Reduction: Empirical from Sistan and Baluchestan Province of Iran. International Journal of Academic Research in Economics and Management Sciences, 2(1), 251–260.
Dogan, E., & Tang, T. C. (2006). Government expenditure and national income: Causality tests for five South East Asian countries. International Business & Economics Research Journal (IBER), 5(10), 49–58. https://doi.org/10.19030/iber.v5i10.3516
Gimba, V. K., & Isah, H. A. (2016). Impact of expansionary budget on living standard in Kaduna State, Nigeria (1996 – 2015). Saudi Journal of Business and Management Studies, 1(3), 118–126. https://doi.org/10.21276/sjbms.2016.1.3.7
Grullion, S. (2012). National income and government spending: Co-integration and causality results for the Dominican Republic. Developing Country Studies, 2(3), 89–98.
Hidalgo-Hidalgo, M., & Iturbe-Ormaetxe, I. (2018). Long-run effects of public expenditure on poverty. The Journal of Economic Inequality, 16(1), 1–22. https://doi.org/10.1007/s10888-017-9360-z
Jeff-Anyeneh, S. E. (2018). Effect of government expenditure on economic growth and development in Nigeria. Nnamdi Azikiwe University, Awka.
Jeff-Anyeneh, S. E., & Ibenta, S. N. (2019). Government expenditure and economic growth: Evidence from the Nigeria economy (1981 – 2016). Advances in Research, 19(4), 1–14. https://doi.org/10.9734/JSRR/2019/v23i630136
Jha, R., Biswal, U. D., & Biswal, B. P. (2005). An emprical analysis of the impact of public expenditure on education and health on poverty in Indian States (Queen’s Economics Department Working Paper No. 998). Ontario. https://doi.org/10.2139/ssrn.236888
Kweka, J. P., & Morrissey, O. (2000). Government spending and economic growth in Tanzania, 1965-1996 (CREDIT Research Paper No. 00/6). Nottingham.
Nduka, J. A., Ananwude, A. C., & Osakwe, C. I. (2019). Expenditure of the federal government of Nigeria: Effect on the standard of living of her citizens. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(4), 57–64. https://doi.org/10.6007/IJARAFMS/v9-i4/6658
Nwosa, P. I. (2014). Government expenditure, unemployment and poverty rates in Nigeria. Journal of Research in National Development, 12(1), 77–84.
Nwude, E. C., & Boloupremo, T. (2018). Public expenditure and national income: Time series evidence from Nigeria. International Journal of Economics and Financial Issues, 8(1), 71–76.
Ogbuagu, A. R., & Ewubare, D. B. (2019). The dynamic correlation between fiscal spending on education, health, consumption and standard of living in Nigeria. International Journal of Economics and Financial Issues, 9(3), 259–267.
Okafor, C., & Eiya, O. (2011). Determinants of government expenditure in Nigeria: An empirical analysis. Research Journal of Business, 5(1), 44–50. https://doi.org/10.3923/rjbm.2011.44.50
Tiwari, M. (2012). Rising government expenditure and the status of poor: A study. Shodh Sanchayan, 3(2), 1–8.
Ukwueze, E. R. (2015). Determinants of the size of public expenditure in Nigeria. SAGE Open, 5(4), 1–8. https://doi.org/10.1177/2158244015621346