Assessing the Role of Public Spending for Sustainable Growth: Empirical Evidence from Nigeria

Abstract

Analogous problems often arise in assessing the efficiency of policy makers in allocating public expenditures for growth and development. This study assessed the efficiency of policy makers in allocating public expenditures and examined the sustainable Growth implications of public spending in Nigeria. The paper employed standard econometric methodological approach, Ordinary Least Square multiple regression model, for the data analysis. The study found that the increase in government expenditure does not contribute to sustainable growth in Nigeria. The findings of the study demonstrated that, the allocation of public expenditures does not fulfill the pareto- optimal criterion. The study suggested the need for the government to review its fiscal policy and adopt the big push strategy in public spending which  is capable of helping the poor countries to break out of their poverty trap and meet the MDGs challenge. This big push strategy which is designed to set low-income economies on a self-sustainable growth path as core investments in infrastructure and human capital will enable poor people to join the global economy and establish the basis for private-sector-led diversified investment and economic growth.

Key words: public spending, fiscal policy, big push strategy, sustainable growth, and infrastructure