The Effects of Government Transport Infrastructure Expenditure on Economic Growth in Ethiopia
No Thumbnail Available
Date
2016-11
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
The study investigates the effects of government transport infrastructure expenditure on
economic growth in Ethiopia between 1975 and 2015 using annual time series data on Gross
Domestic Product (GDP), transport infrastructure, human capital, defense, agriculture and
culture and sport. The time series property of the data is checked for the presence of unit root
using Augmented Dickey Fuller (ADF) unit root test technique .All variables are integrated,
which implies that the variables has long run relationship .For the analysis co integration and
Error Correction Model together with descriptive statistics (table, graph and chart) are used
.The result reveals that government expenditure on transport infrastructure has positive and
significant effects on economic growth .Additionally, from the expenditures incorporated for the
analysis, expenditures on human capital, agriculture and defense have also positive and
significant long run effect. However, expenditure on culture and sport has negative and
significant impacts on the economic growth. On the other hand, results from the Vector Error
Correction Model (VECM) shows that agriculture and transport infrastructure are significant in
affecting economic growth in the short run but expenditure on human capital, defense and
culture and sport are all insignificant. Based on the finding, the writer would like to recommend
that government should allocate more budgets for the transport infrastructure investment
together with agriculture, defense and human capital and reduce its expenditure on culture and
sport.
Description
Keywords
Government Transport Infrastructure Expenditure on Economic