AN ASSESSMENT OF THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH OF NIGERIA
The study investigates the impact of government expenditure on economic growth of Nigeria from the period 1980-2011. The objective was set to address the problem of utilization of revenue targeted to improving the economic condition of Nigeria. The review of theoretical and empirical literature provided a basis for the selection and specification of model which was used to show if government capital and recurrent expenditure has positive or negative impact on economic growth. The data were got from CBN statistical bulletin. To proper solution to the problem, policies were recommended to tackle the setbacks to economic growth.
1.1.BACKGROUND OF THE STUDY
In all most all economics today government intervention in undertaking fundamental roles of allocation, stabilization, distribution and regulation, especially where or when market proves insufficient or its outcome is socially unacceptable. Government also intervenes, particularly in developing economics to achieve macroeconomics objective such as economic growth and development, full employment, price stability and poverty reduction.(AESS PUBLICATION 2014). Public finance is to provide information to all arms of government in other to provide use full data as done for the develop nations that transferred public finance technology to developing nation. Public finance is used for allocation, stabilization and distribution (Musgrave and Musgrave 1989). Public finance is the study of the principle underlying the spending and raising of funds by public authorities (shirras, 1969). It is the field of economics that studies government activities and alternative means of financing expenditure (hymann 1993)) It is a fact that no society though out history has ever attained a high level of economic influence without a government. Where government do not exist anarchy reigned and little wealth was accumulated by productive economy activity. Are government took hold the rule of law and the establishment of private property right oen contributed and it has similarly impacted on their societies as well. Economic growth represents the expansion of a country GDP or outputs. Growth means an increase in economic activities. Todaro (1995) Citing Kuznets defined a country economic growth as a long term rise in capacity to supply increasing diverse economic goods to is population, this growth capacity based on advancing technology and the institutional and ideological adjustment that is demand. The board objective of this project is the role of government expenditure in economic growth. Government is necessary through by no means sufficient condition for prosperity it is also a facts, however, that where government have monopolized the
allocation of resources and other economic decisions, societies have been successful in attaining relatively high level of economic influence.
Economic progress is limited both when it is at or near 100%. The experience of the old Soviet Union is revealing as well the comparison of east and West Germany during the cold war era or of north and South Korea today.