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Government Spending And Economic Growth In Tanzania 1970-2010

Nelson John Ruturagara

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Abstract

The objective of this paper is to analyze the impact of government spending on economic growth in Tanzania for the period 1970-2010. We find that government expenditure is positively correlated with economic growth. Moreover, we find that only public expenditure of the current period and lagged in two period, growth of GDP lagged in one period and growth of education expenditure of the current period are significant in explaining economic growth of Tanzania. Lastly we find that error correction term is negative and significant at 5% indicating that the model converge to the equilibrium stead state in the long-run.

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What this paper is about

The objective of this paper is to analyze the impact of government spending on economic growth in Tanzania for the period 1970-2010. We find that government expenditure is positively correlated with economic growth. Moreover, we find that only public expenditure of the current period and lagged in two period, growth of GDP lagged in one period and growth of education expenditure of the current period are significant in explaining economic growth of Tanzania. Lastly we find that error correction term is negative and significant at 5% indicating that the model converge to the equilibrium stead state in the long-run.

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Available abstract

The objective of this paper is to analyze the impact of government spending on economic growth in Tanzania for the period 1970-2010. We find that government expenditure is positively correlated with economic growth. Moreover, we find that only public expenditure of the current period and lagged in two period, growth of GDP lagged in one period and growth of education expenditure of the current period are significant in explaining economic growth of Tanzania. Lastly we find that error correction term is negative and significant at 5% indicating that the model converge to the equilibrium stead state in the long-run.

Key concepts: Tanzania, Government expenditure, Economics, Government spending, Public expenditure, Government (linguistics), Error correction model, Period (music)

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