Impact of Public Spending in Infrastructure on Influencing Economic Development from East Africa Countries: The Vector Auto Regressive Analysis

Abstract

Infrastructure development is essential for a country's growth and development. The goal of this study is to look at how public infrastructure expenditure affects economic growth in East Africa. Countries:The Vector Auto Regressive Analysis. The study employed a time series data research approach using secondary data. The population was applied to the financial records from 1984/85 to 2015/16. (Annual Data). The study's sample size was 32 yearly observations. The study's research site was purposefully chosen in Uganda. The data was gathered from a variety of trustworthy sources, including the World Bank. The Johansen co integration test shows a long-run relationship between public investment in infrastructure, communication, and electricity and the rate of economic growth. Simultaneously, the Granger-Causality test revealed indirect causality between economic development rate and all components of public spending used, with a P- Value of 0.04; and the Vector Auto Regressive (VAR) consequences revealed that public spending on infrastructure, communication, and energy had a direct effect on economic development rate. According to the study, increased investment on major infrastructure such as water facilities, airports, highways, power, trains, and communication adds considerably to the rate of economic development by boosting the efficiency of the public and private sectors.