Government Expenditure and Economic Growth in Tanzania

Authors

  • Petro Sauti magai University of Dar es Salaam
  • Rosemary Emmanuel Masele University of Dar es Salaam Business School (UDBS)

DOI:

https://doi.org/10.56279/ter.v13i2.108

Keywords:

Government Expenditure, Economic Growth, ARDL, Tanzania

Abstract

This study examines the impact of government expenditure on economic growth, focusing on health, infrastructure, education, and agriculture in Tanzania. The data from 1970–2020 were analysed using the STATA software. Government expenditure on education, health, agriculture, and infrastructure sectors were the independent variables, while GDP was the dependent variable. Wagner’s law of increasing state activity and Keynesian economic theory were used to guide the study. Unit root test and Johansen co-integration test were conducted. The Johansen co-integration test results indicated the absence of a long-run relationship between all explanatory variables and economic growth. However, the ARDL model revealed that government health expenditure had a low effect on economic growth compared to infrastructure, education, and agriculture expenditures; all of which had higher effects. The study recommends that more government resources be spent on substantial infrastructure.

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Published

2024-01-31

How to Cite

magai, P. S., & Masele, R. E. . (2024). Government Expenditure and Economic Growth in Tanzania. Tanzanian Economic Review, 13(2), 60-. https://doi.org/10.56279/ter.v13i2.108