Effects of Public Expenditure on Economic Growth in the CEMAC Subregion: A Comparative Analysis between the Fragile and Non-fragile States
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Date
2021-05-22
Authors
Luc, Nembot Ndeffo
André, Melachio Tameko
Kos, A Mougnol Alice
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
Chad, Central African Republic, and Congo have been identified by the African
Development Bank as fragile states. Despite their socio-political stability, the other
countries of the subregion, which are Cameroon, Gabon, and Equatorial Guinea, are
exposed to risks of various kinds related to refugees from neighbouring countries
and war against the Islamic sect Boko Haram. This study aims at carrying out a
comparative analysis of the effects of public spending on economic growth in the
aforementioned six countries by highlighting the differential effects of investment
spending and consumption spending. The study covers the period 1975-2016. Time
series regressions using the ARDL approach is applied. Taking into account the
threshold effects for each country and each type of expenditure seems important for
better formulation of policy recommendations. The results reveal a stable long-run
relationship between public expenditure and the economic growth rate in the CEMAC
subregion. Policies aiming at increasing the share of public investment expenditure to
the detriment of public operating expenditure are recommended. Public expenditure
should also be oriented towards productive development projects.