Does Composition of Government Spending Matter to Economic Growth in Nigeria? Evidence from Autoregressive Distributed Lag (ARDL) Bounds Test

This paper assesses the impact of the composition of government spending on economic growth in Nigeria using autoregressive distributed lag for the periods between 1980 and 2012. We found that the various types of government spending have different impact on economic growth. In view of the coefficient of the variables, the interpretation holds that an increase in administrative, health and transport and communication expenditure causes improvement in the economic output while expenditure on agriculture significantly reduces economic growth in the long run. The estimated short-run results revealed that the health and transport and communication expenditure have significant negative effect on real GDP. Administrative expenditure and education expenditure have no impact in the short run while agriculture has a significant short run impact on economic growth.