Government Infrastructure Spending and Economic Growth in Kenya: An Autoregressive Distributed Lag Model Approach

IF 0.4 Q4 ECONOMICS
M. K.
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Abstract

Purpose: Since independence, the Government of Kenya has pursued many objectives, one being economic growth. Over the previous few many years, government expenditure has been developing faster than the GDP growth. Infrastructure, one of the components of public spending, has also experienced tremendous growth in government spending and development, which has not been directly reflected in the GDP growth rate. Following such situation, it calls for analyzing the impact that government infrastructure expenditure has on economic growth in Kenya with a focal point on three sectors beneath infrastructure that the public sector spends closely on; transport, energy and fuel, and Information Communication and Technology (ICT). The study's overall objective is to find out the effects of government spending on the three sampled sectors of government infrastructure on economic growth in Kenya and then draw policy implications from the findings. The specific objectives were; to investigate the effect of transport infrastructure expenditure on economic growth in Kenya, to examine the effect of energy & fuel infrastructure expenditure on economic growth in Kenya, and to examine the effect of ICT infrastructure expenditure on economic growth in Kenya. Further, Bounds F-test to cointegration as well as the Autoregressive Distributed Lag Model (ARDL) were used to realize the objectives. Methodology: The data was collected covered 1990 – 2020 for the three sectors of infrastructure: transport, energy & fuel, and ICT. Several tests on the time series data were carried out on the secondary data obtained, after which (ARDL) was employed in analysing the data. Findings: The outcome showed that government expenditure on transport, energy, fuel, and ICT infrastructure sectors affected economic growth either in the short or the long run. Based on the ECM regression findings, the long-run regression outcome revealed that expenditure on energy and fuel promotes economic growth. On the contrast, the findings showed that government expenditure on transport and ICT sectors exhibited a negative effect on GDP growth rate. Public expenditure on transport and ICT infrastructure sectors positively impacted economic growth in the short term, while the energy and fuel sectors exhibited a negative impact on GDP. Other control variables inclusive of trade openness and FDI showed either a positive or negative effect on economic growth either in long or short run. Inflation, particularly, exhibited a negative effect on GDP in the long run, in addition to within the short run. Unique Contribution to Theory, Practice and Policy: Based on the empirical findings, this study validates the Keynesian theory which stipulates that public expenditure positively contributes to economic growth. Based on this theory, public expenditure is an exogenous factor capable of being applied as a policy instrument in promoting economic growth.
肯尼亚政府基础设施支出与经济增长:一种自回归分布滞后模型方法
目的:自独立以来,肯尼亚政府追求了许多目标,其中之一是经济增长。在过去的几年里,政府支出的增长一直快于GDP的增长。基础设施作为公共支出的组成部分之一,也经历了政府支出和发展的巨大增长,这并没有直接反映在GDP增长率上。在这种情况下,它要求分析政府基础设施支出对肯尼亚经济增长的影响,重点关注公共部门密切关注的基础设施以下三个部门;交通运输、能源和燃料、信息通信和技术(ICT)。该研究的总体目标是找出政府支出对肯尼亚政府基础设施的三个抽样部门对经济增长的影响,然后从研究结果中得出政策启示。具体目标是;调查交通基础设施支出对肯尼亚经济增长的影响,检查能源和燃料基础设施支出对肯尼亚经济增长的影响,并检查ICT基础设施支出对肯尼亚经济增长的影响。此外,使用协整边界f检验和自回归分布滞后模型(ARDL)来实现目标。方法:收集的数据涵盖1990年至2020年的三个基础设施部门:交通运输、能源和燃料以及信息通信技术。对获得的二次数据对时间序列数据进行了多次检验,之后使用(ARDL)对数据进行了分析。研究结果表明,政府在交通、能源、燃料和信息通信技术基础设施领域的支出对经济增长有短期或长期的影响。基于ECM回归结果,长期回归结果显示能源和燃料支出促进经济增长。相比之下,研究结果显示,政府在交通和信息通信技术部门的支出对GDP增长率产生了负面影响。运输和信息通信技术基础设施部门的公共支出在短期内对经济增长产生了积极影响,而能源和燃料部门对国内生产总值产生了负面影响。包括贸易开放程度和外国直接投资在内的其他控制变量在长期或短期内对经济增长表现出积极或消极的影响。特别是通货膨胀,除了在短期内,在长期内对GDP表现出负面影响。在理论、实践和政策方面的独特贡献:基于实证研究结果,本研究验证了凯恩斯主义关于公共支出对经济增长有积极贡献的理论。根据这一理论,公共支出是一种外生因素,能够作为促进经济增长的政策工具加以应用。
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