The Impact of Government Expenditure on Infrastructure in Nigeria: A Co-integration & Error Correction Specification

Abstract

This paper attempts to investigate the  impact of Government expenditure on infrastructure in Nigeria, using the cointegration and error correction Specifications.

The result of the error correction mechanism (ECM) indicates a feedback of about 99. 38 percent of   previous year’s disequilibrium from long-run elasticity of rate of urbanization, openness, government revenue, external reserves, population density and type of government. The results of the Chow test revealed that public expenditure on infrastructure were stable and did not change over time as evidenced by F* value of 1.8214 against F-critical value of 2.580 at the 5% level during the period.

Keywords: Government Expenditure, Economic Growth, External Reserve, Co-integration, Error Correction Mechanism, Infrastructure, Public Goods