Public Expenditure and Economic Growth: A case study of Uganda

The primary objective of this book was to investigate empirically how government expenditure impacts economic growth in Uganda. The study employed the disaggregated expenditure over the period from 1985 to 2015; so as to establish the government expenditures that have contributed to growth using time series data. Using the Johansen co-integration test, this study tested for unit root and found that only GDP and Terms of trade was stationary at level. While using the Vector Error Correction model, the findings showed that expenditures on health and defense to be positive and statistically significant effect on growth. In contrast, education and agriculture expenditure were negative and significant. This study suggests that for Uganda, increasing spending on health and defense budget to promote economic growth will be appropriate, but more funds should be channeled towards other sectors like education and agriculture which are the countries back born and pillars of economic growth respectively.