TITLE:
Public Spending and Growth in the Countries of the Economic Community of West African States
AUTHORS:
Amath Ndiaye
KEYWORDS:
Economic Growth, Public Spending, ECOWAS
JOURNAL NAME:
Modern Economy,
Vol.9 No.11,
November
29,
2018
ABSTRACT: Our research focuses on the impact of government
spending on economic growth in the countries of the Economic Community of West
African States (ECOWAS). It draws on new theories of endogenous growth, and
more specifically on Rajhi model. After the tests of specification, an ARDL
model was estimated for each of the countries which have cointegration
relationships. For those whose cointegration relationship does not exist, a VAR
estimate was made. So according to estimates, Total Public Spending in most of
the countries of ECOWAS has not positive influence on the economic growth as
well in the short term as in the long term. Also in most of the countries,
Public Consumption did not positively affect economic growth as well in the
long run as in the short run. Regarding Public Investment, we have the same
results; it does not positively affects economic growth in most of the ECOWAS
countries. Burkina Faso, Guinea and Ivory Coast are the three excepted
countries where Total Public Spending has a positive effect on GDP growth in
the long term but not in the short run. For further analysis we looked at
Public Consumption and Public Investment. It is only in four out of ten
countries of the sample that, we found that Public Consumption expenditures
positively affect economic growth in the short term while the impact generally
is negative in the long term. Regarding Public investment, it is only in three
out of ten countries (Burkina Faso, Cote d’Ivoire, Ghana), that it was found
determinant to economic growth in the long term.