Brief Introduction

The direction and magnitude of the relationship between government expenditure and economic growth have continued to generate a series of debates among scholars. It is obviously presumed that Government performs two basic functions- protection (and security) and provisions of certain public goods.

The Protective function entails the creation of rule of law and enforcement of property rights which helps to minimize risks of criminality, protect life and property, and the nation from external attacks; while the defense, roads, education, health, power, etc are goods provided by the government (Abu and Abullahi 2010).

Many scholars have supported the fact that increases in government expenditure on socio-economic and physical infrastructures encourage economic growth. For instance, studies conducted by Abu and Abullahi, 2010, Al-Yousif, 2000, Abdullah, 2000 and Cooray, 2009 all concluded that expansion of government expenditure induces economic growth positively.

Their studies simply suggest that government expenditure on health and education raises the productivity of labour and increases the growth of national output. Similarly, expenditure on infrastructure such as roads, communications, power, etc, reduces production costs, increases private sector investment and profitability of firms, thus fostering economic growth (Abu N et al 2010).

Table of Contents

Contents Pages
Title Page i
Certification ii
Dedication iii
Acknowledgment iv
Abstract v
Table of contents vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 4
1.3 Research Questions 7
1.4 Objectives of the Study 7
1.5 Research Hypothesis 7
1.6 Plan of the Study 8
CHAPTER TWO: LITERATURE REVIEW
2.1 Literature Review 9
2.2 Conceptual Framework on government expenditure 17
2.3 Trends in Federal Government Expenditures in Nigeria (1986-2014) 20
2.4 Government Spending and Economic Growth 22
2.5 Theoretical Framework 24
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 28
3.2 Sampling Procedure 28
3.3 Sources of data 28
3.4 Model Specification 28
3.5 Method of Estimation 29
3.6 Conclusion 29
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1 Estimation Procedure 30
4.2 Testing for Co-integration using Johansen approach 31
4.3 trace test 32
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 35
5.2 Conclusion 35
5.2 Recommendations 36
Bibliography 37
Appendix 40