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Economic Growth and Development in Ethiopia pp 105–136Cite as

Impact of Government Sectoral Expenditure on Economic Growth in Ethiopia

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Abstract

The main objective of this study is examining the impact of government sectoral expenditure on economic growth in Ethiopia over the period 1975–2015. It focuses on sectoral expenditures on economic, social, general services and other services sectors. The major contributions of this study are studying expenditure components in line with the current categorization using up-to-date data. The study uses secondary data collected from the Ministry of Finance and Economic Cooperation of Ethiopia and the National Bank of Ethiopia. It uses both descriptive and econometrics data analysis methods as also the Augmented Dickey Fuller, the Johansen cointegration test and the vector error correction model to test for stationarity and cointegration and to analyze the long run and the short run dynamics of the model. The empirical results show that general services expenditure had a negative and significant effect on economic growth.

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Author information

Authors and Affiliations

  1. Department of Development Economics, Rift Valley University, Addis Ababa, Ethiopia

    Tufa Garoma

  2. Economics at Department of Economics, Ambo University Woliso Campus, Woliso, 217, Ethiopia

    Mekonnen Bersisa

Authors
  1. Tufa Garoma
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  2. Mekonnen Bersisa
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Correspondence to Tufa Garoma .

Editor information

Editors and Affiliations

  1. Department of Economics, Sogang University, Seoul, Korea (Republic of)

    Almas Heshmati

  2. Department of Economics, Sogang University, Seoul, Korea (Republic of)

    Haeyeon Yoon

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Garoma, T., Bersisa, M. (2018). Impact of Government Sectoral Expenditure on Economic Growth in Ethiopia. In: Heshmati, A., Yoon, H. (eds) Economic Growth and Development in Ethiopia. Perspectives on Development in the Middle East and North Africa (MENA) Region. Springer, Singapore. https://doi.org/10.1007/978-981-10-8126-2_6

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