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August 11, 2025EconomicsOpen Access

Government Spending and Economic Growth Nexus: A Contemporary Evidence in Sub-Saharan Africa

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Authors

IAIsubalew Daba AyanaWollega UniversityWDWondaferahu Mulugeta DemissieJimma UniversityASAtnafu Gebremeskel SoreAddis Ababa University

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Implication

Analysis finds negative impact of government spending on GDP per capita in Sub-Saharan Africa, suggesting fiscal oversight is crucial.

Key Points

  • Government expenditure negatively affects economic growth in Sub-Saharan Africa, both short and long run.
  • A one percentage increase in government consumption spending leads to a 0.0342% decline in GDP per capita growth in the short run.
  • Employing System GMM for panel data analysis across 41 countries from 2012-2022 highlights significant findings.
  • Careful monitoring of government spending is essential for economic growth sustainability in these regions.

Cite This Study

Ayana et al. (2025) studied this question.

synapsesocial.com/papers/68af6c107567bf4f94fea321https://doi.org/10.11648/j.eco.20251403.11
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