THE IMPACT OF PUBLIC EXPENDITURE ON ECONOMIC GROWTH: A COMPARATIVE ANALYSIS OF SELECTED COUNTRIES. (1970-2002).

AUTHOR: OFURUM CLIFFORD OBIYO. PhD.

FEDERAL UNIVERSITY OF TECHNOLOGY OWERRI, IMO STATE, NIGERIA

Theoretical Background: The problem of determining the change in the size of public expenditure has occupied the attention of researchers and theorists over the decades. Several theories have been advanced to explain this problem in different countries of the world. Among them are; Wagner’s Law of increasing state
activities; Wiseman-Peacock Critical limit hypothesis and Leviathan differential productivity and relative prices hypothesis. A critical look at these theories reveals a plethora of factors that are argued to determine the change in the size (and of course, the growth) of pubic expenditure.. The extent to which these factors affect the change in the size of public expenditure in the developed and developing
countries particularly in Nigeria are yet to be fully ascertained. It is for this reason that we embarked on this study. The study is an attempt at contributing to the resolution of theoretical controversy, drawing empirical evidence from Kenya, Nigeria, United Kingdom and the United States of America. Methodology: The methods employed were largely econometric, involving the construction and estimation of multi-regression model. Based on the analysis, it
was concluded: – That there exists a significant relationship between change in public expenditure and changes in the selected variables (Revenue, GDP, GDP per capital, inflations, population and subsidy/transfer) in the selected countries. – That Nigeria’s economic problem started in 1987, the year when our public
expenditure started being greater than our GDP . Based on the finding the following policy recommendations were made amongst
others: Effort should be made to increase our revenue base.
The country should be rid of corrupt official as a matter of priority.

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