Yıl 2019, Cilt: 11 Sayı : 1 Sayfalar 33 - 48 2019-06-17
ECONOMIC GROWTH MODELS AND GOVERNMENT EXPENDITURE IN SOUTH AFRICA: A DISAGGREGATED IMPACT ANALYSIS
İfeoma Anthonia IWEGBUNAM,Zurika ROBİNSON
12 261

Öz This study examined the effects of government expenditure on different components ofeconomic growth in South Africa. The six key policy variables employed in the analysiswere derived from the Solow neoclassical growth model and the New Growth Path(NGP), a macroeconomic framework designed to address the main challenges(unemployment, poverty and inequality) facing the economy as a result of its politicalpast. The analysis of the relationship was carried out using the cointegration model, longrun estimates and the VECM, because assessing the effects of government expenditure oneconomic growth goes beyond the short-term period, due to the fact that it takes timebefore government outlays have an effect on the economy. The findings from the analysisrevealed that though there exists a long-run equilibrium relationship among the variableswith the cointegration results, the long-run estimates showed that aggregate privateconsumption expenditure and employment-to-population ratio are significantly, butnegatively, related to economic growth, while net inflows of foreign direct investmentand gross fixed capital formation are negatively related to gross government expenditure.This implies that government needs to direct most of its spending towards humancapital development, in order to overcome the challenges. However, governmentexpenditure needs to be monitored, since excessive public capital expenditure mightreduce the positive impact of foreign direct investment on economic growth. Thestudy therefore suggests that government should consider increasing its expenditure on the significant variables that support labour and capital development, in order toenhance economic growth in South Africa.

Anahtar Kelimeler

Government expenditure, economic growth models, government policy, VECM, South Africa
Agostino, G., Dunne, J.P. and Pieroni, L. (2016), “Government Spending, Corruption andEconomic Growth,” World Development, Vol. 84, pp. 190-205.
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Konular
Yayımlanma Tarihi 17 Haziran 2019
Bölüm Araştırma Makalesi
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Yayımlanma Tarihi : 17 Haziran 2019


Makalenin Yazarları
İfeoma Anthonia IWEGBUNAM
Zurika ROBİNSON