Version 1
: Received: 4 May 2018 / Approved: 8 May 2018 / Online: 8 May 2018 (05:20:33 CEST)
How to cite:
Ahmed, E.M.; Hanif, C.M. Sub-Saharan African Countries Public Expenditure and Economic Growth: Wagner’s Panel Cointegration and Causality Applications. Preprints2018, 2018050121. https://doi.org/10.20944/preprints201805.0121.v1
Ahmed, E.M.; Hanif, C.M. Sub-Saharan African Countries Public Expenditure and Economic Growth: Wagner’s Panel Cointegration and Causality Applications. Preprints 2018, 2018050121. https://doi.org/10.20944/preprints201805.0121.v1
Ahmed, E.M.; Hanif, C.M. Sub-Saharan African Countries Public Expenditure and Economic Growth: Wagner’s Panel Cointegration and Causality Applications. Preprints2018, 2018050121. https://doi.org/10.20944/preprints201805.0121.v1
APA Style
Ahmed, E.M., & Hanif, C.M. (2018). Sub-Saharan African Countries Public Expenditure and Economic Growth: Wagner’s Panel Cointegration and Causality Applications. Preprints. https://doi.org/10.20944/preprints201805.0121.v1
Chicago/Turabian Style
Ahmed, E.M. and Choudhry Mohammad Hanif. 2018 "Sub-Saharan African Countries Public Expenditure and Economic Growth: Wagner’s Panel Cointegration and Causality Applications" Preprints. https://doi.org/10.20944/preprints201805.0121.v1
Abstract
In this paper, the validity of the Wagner’s law is investigated in tenth selected Sub- Saharan African countries, namely Botswana, Equatorial Guinea, Mauritania, Nigeria, South Africa, Sierra Leone, Tanzania, Ethiopia, Madagascar, and DR Congo. Five variants of the Wagner’s law were tested for the period 2005-2014, using panel econometric approaches encompassing cointegration and causality. The study found a long run relationship between the public expenditure and the various explanatory variables used as proxies of income. The long-run causality tests indicate that there is bidirectional causality between expenditure and income in all models with the exemption of the Gupta model. It is concluded that for Sub-Saharan Africa, both the Wagner’s law the Keynesian hypothesis tend to be valid under the period of investigation. The explanation is that there has been the tendency for public expenditure to grow relative to national income (Wagner’s law) and that public expenditure is a policy instrument (an exogenous factor) for improving national income (Keynesian hypothesis) during the 10-year period.
Keywords
economic growth; public expenditure; panel cointegration; sub-Saharan Africa
Subject
Business, Economics and Management, Economics
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
