Assessment of Determinants of Fiscal Policy in Nigeria 1980-2014.
ABSTRACT
This study examined the determinants of fiscal policy in Nigeria (1980-2014). To do this, it reviewed government expenditure as a determinant of fiscal policy in Nigeria.
The study adopted Ordinary Least Squared Method in its analysis using data from the Central bank of Nigeria statistical bulletin. This study made use of secondary data to assess the determinants of fiscal policy in Nigeria.
It reviewed the Keynesian theory of fiscal policy and the classical view of government expenditure. It also reviewed the Peacock-Wiseman theory and Wagner’s theory.
In this study, the descriptive statistics of the variables indicate that all the variables, GOVEXP, GDP, LABFORCE, REVENUE, POPU, INVEST, TRANSFER and INF have positive mean values with 35 observations.
The standard deviation showed that the highest standard deviation of (9794981) is recorded by the GDP while the least standard deviation of (0.231467) is recorded by INVEST.
The kurtosis coefficients showed that three of the variables are leptokurtic, two variables, are mesokutic while three of the variables are platykurtic.
TABLE OF CONTENTS
Title page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of contents vi
List of Tables viii
List of figures ix
Chapter One: Introduction
1.1 Background to the Study 1
1.2 Statement of the Problem 3
1.3 Research Questions 3
1.4 Research Objectives 3
1.5 Justification of the Study 4
1.6 Scope of the Study 4
1.7 Organisation of the Study 4
Chapter Two: Literature Review
2.1 Introduction 5
2.2 Overview of fiscal policy 5
2.3 Theoretical review 6
2.3.1 Theories of government expenditure 6
2.4 Theoretical Framework 11
2.4.1 New open economy Marcroeconomies (NOEM) 11
2.5 Empirical review 14
Chapter Three: Research Methodology
3.1 Model specification 18
3.2 Data collection 19
3.3 Data analysis method 19
3.4 Estimation procedure 19
3.5 Unit root test 20
3.6 The co-integration approach 20
3.7 Econometric software 22
Chapter Four: Data presentation and analysis
4.1 Descriptive Statistics 23
4.2 Multicolinearity Test 24
4.3 Unit root test 26
4.4 Cointegration 27
4.5 Regression result 29
4.6 Statistical Criterion 31
4.7 Normality Test 33
4.8 Heteroscedasticity Test 33
Chapter Five: Summary, and Conclusion Recommendations
5.1 Summary of findings 35
5.2 Conclusion 35
5.3 Recommendations 36
References 37
Appendix 41
INTRODUCTION
Background to the study
Fiscal policy is important to the growth of any economy because government’s power to tax and to spend will affect the disposable income of citizens and corporations, including the general business climate.
It has become a vital tool in promoting growth and development of a country.
It is also an important part which is used in developing economies by government. The word “Fiscal Policy” has always been associated with the use of public expenditure and tax to control the state of economic activities.
Fiscal policy is associated with government deliberate actions in tax levying and money spending so as to influence macro economic variables in the right directions.
As Fiscal policy entails the use of taxation, government spending, fiscal deficit and borrowing to manipulate the pattern of economic activities and the growth of aggregate demand, employment and output,
it also involves government’s management of the economy through the control of its income and spending power to attain specific desired macroeconomic objectives amongst which is economic growth (Medee and Nembee, 2011)
REFERENCES
Abata, M. A., kehinde, J.S., Bolarinwa, S. A., (2012) Fiscal/Monetary Policy and Economic Growth in Nigeria: A Theoretical Exploration. International Journal of Academic Research in Economics and Management Sciences September 2012, Vol. 1, No. 5 ISSN: 2226-3624.
(Okigbo 2008) in Enahoro, J. A., O. Jayeola, Onou, p., (2013) operational performance of fiscal and monetary policies in nigerian financial institutions. Asian Economic and Financial Review, 2013, 3(1):62-74.
Abata, M. A., kehinde, J.S., Bolarinwa, S. A., (2012) Fiscal/Monetary Policy and Economic Growth in Nigeria: A Theoretical Exploration. International Journal of Academic Research in Economics and Management Sciences September 2012, Vol. 1, No. 5 ISSN: 2226-3624.
Adeniran, J.O, Yusuf, S.A and Adeyemi, O. A.(2014), The Impact of Exchange Rate Fluctuation on the Nigerian Economic Growth: An Empirical Investigation; International Journal of Academic Research in Business and Social Sciences August 2014, Vol. 4, No. 8 ISSN: 2222-6990
Agbonkhese, A. O. and Asekome, M. O.(2014) impact of public expenditure on the growth of Nigerian economy’; European Scientific Journal edition vol.10, No.28 ISSN: 1857 – 7881 (Print) e – ISSN 1857- 7431. http://eujournal.org/index.php/esj/article/viewFile/4397/4194
Akanbi, O. A. (2014). Government Expenditure in Nigeria: Determinants and Trends. Mediterranean Journal of Social Sciences, 1-2.
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