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The Impact Of Government Expenditure On Economic Growth In Nigeria (1980-2010)
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1.4 STATEMENT OF HYPOTHESIS.
Ho: The government expenditure has no positive effect on the economic growth of Nigeria.
H1: The government expenditure has positive effect on the economic growth of Nigeria.
1.5 SIGNIFICANCE OF THE STUDY.
Whilst
acknowledging the fact that this study is not the first of its kind
using the Nigeria data. However, it shall go a little further than
earlier works to correctly capture all known composition of public
expenditure during the years under review to assess the impact of public
expenditure on economic growth.
The relationship between government
spending and growth is especially important for developing countries
like Nigeria, most of which have experienced increasing levels of public
expenditures over time. This has tended to be associated with rising
fiscal deficit, suggesting their limited ability to raise sufficiently
revenue to finance higher level of expenditure. Rising deficit tends to
retard economic growth in developing countries because of the inability
of such country to check inflation during deficit years. Thus, this
study gives a good insight into problems created by rising government
expenditure and how the same impact on growth.
Also, this study will
enable policy makers to promote economic without recourse to huge
deficit finance. This often results in inflation particularly when
increase in government expenditure is no matched by corresponding
increase in output. The bitter experience of the oil boom is still fresh
in many minds.
1.6 SCOPE AND LIMITATIONS OF THE STUDY.
The growth
of government spending and its impact on the performance of the economy
shall be examined with data spanning from 1980 to 2010. Attention shall
mainly be focused on exhaustive and productive government expenditure
during the period under review.
One major limitation of the study is
that the data to be used for the empirical analysis may be porous as
such data are often manipulated for political reason. Besides, the study
shall cover a limited number of years because of none availability of
data. Another constraint to be faced in the cause of my study is time
factor; the time frame of my work is going to hinder me from gathering
as much information needed for proper analysis of the impact of
government expenditure.
Another limitation to my study is finance,
lack and insufficient finance for finding sources of information and
acquisition of material for my study. But not withstanding of these
limitations the study will serve its purpose.
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