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The impact of public spending on roads infrastructure on Malawi's economic growth
Public expenditure has been a cardinal objective of all successive governments since Malawi gained its independence in 1964. Successive administrations have on different occasions made attempts to direct government spending towards achieving objectives that have direct bearing on its populace. Accor...
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| Format: | Thesis |
| Language: | English |
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Research of GSB
2018
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| _version_ | 1867613323713839104 |
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| access_status_str | Open Access |
| author | Makhwatha, Alex Simeon |
| author2 | Gossel, Sean J |
| author_browse | Gossel, Sean J Makhwatha, Alex Simeon |
| author_facet | Gossel, Sean J Makhwatha, Alex Simeon |
| author_sort | Makhwatha, Alex Simeon |
| collection | Thesis |
| description | Public expenditure has been a cardinal objective of all successive governments since Malawi gained its independence in 1964. Successive administrations have on different occasions made attempts to direct government spending towards achieving objectives that have direct bearing on its populace. According to Keynesian view, the increase in public spending on socio-economic and physical structures is important and encourages economic growth. However, Classical economists on the other hand argue that the increase in public expenditure may shift resources from the productive private sector to public sector which they believe is unproductive and hence, crowd out overall performance of the economy. These views indicate that policymakers worldwide including Malawi are under debate whether increase in public spending helps or hinders economic growth. Applying ADF and KPSS tests, Johansen-Juselius co-integration multivariate procedure and TYDL Granger causality test, this study investigates the relationship between government expenditure on roads infrastructure and GDP in Malawi using time series data spanning from 1978 to 2010. ADF and KPSS tests indicate that the series under investigation are integrated of order one (i.e. I(1)). The results of the Johansen co-integration tests indicate a long-run relationship between the roads expenditure and economic growth. The TYDL test indicates the existence of unidirectional causality running from roads expenditure and economic growth which supports Keynes hypothesis that government spending affects economic growth. The study, therefore, concludes that government spending on roads infrastructure causes economic growth, which confirms the main goal of MGDS that aims at achieving economic growth through infrastructure development. Based on these results, the study recommends that government should ensure that both capital and recurrent expenditure are properly managed to accelerate economic growth. More so, Government should promote efficient resource allocation on human capital development by encouraging more private participation to ensure productivity for intensive economic growth. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/29036 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:34:17.944Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2018 |
| publishDateRange | 2018 |
| publishDateSort | 2018 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/29036 The impact of public spending on roads infrastructure on Malawi's economic growth Makhwatha, Alex Simeon Gossel, Sean J Development Finance Public expenditure has been a cardinal objective of all successive governments since Malawi gained its independence in 1964. Successive administrations have on different occasions made attempts to direct government spending towards achieving objectives that have direct bearing on its populace. According to Keynesian view, the increase in public spending on socio-economic and physical structures is important and encourages economic growth. However, Classical economists on the other hand argue that the increase in public expenditure may shift resources from the productive private sector to public sector which they believe is unproductive and hence, crowd out overall performance of the economy. These views indicate that policymakers worldwide including Malawi are under debate whether increase in public spending helps or hinders economic growth. Applying ADF and KPSS tests, Johansen-Juselius co-integration multivariate procedure and TYDL Granger causality test, this study investigates the relationship between government expenditure on roads infrastructure and GDP in Malawi using time series data spanning from 1978 to 2010. ADF and KPSS tests indicate that the series under investigation are integrated of order one (i.e. I(1)). The results of the Johansen co-integration tests indicate a long-run relationship between the roads expenditure and economic growth. The TYDL test indicates the existence of unidirectional causality running from roads expenditure and economic growth which supports Keynes hypothesis that government spending affects economic growth. The study, therefore, concludes that government spending on roads infrastructure causes economic growth, which confirms the main goal of MGDS that aims at achieving economic growth through infrastructure development. Based on these results, the study recommends that government should ensure that both capital and recurrent expenditure are properly managed to accelerate economic growth. More so, Government should promote efficient resource allocation on human capital development by encouraging more private participation to ensure productivity for intensive economic growth. 2018-11-07T13:03:39Z 2018-11-07T13:03:39Z 2015 Master Thesis Masters MCom http://hdl.handle.net/11427/29036 eng application/pdf Research of GSB Faculty of Commerce University of Cape Town |
| spellingShingle | Development Finance Makhwatha, Alex Simeon The impact of public spending on roads infrastructure on Malawi's economic growth |
| thesis_degree_str | Master's |
| title | The impact of public spending on roads infrastructure on Malawi's economic growth |
| title_full | The impact of public spending on roads infrastructure on Malawi's economic growth |
| title_fullStr | The impact of public spending on roads infrastructure on Malawi's economic growth |
| title_full_unstemmed | The impact of public spending on roads infrastructure on Malawi's economic growth |
| title_short | The impact of public spending on roads infrastructure on Malawi's economic growth |
| title_sort | impact of public spending on roads infrastructure on malawi s economic growth |
| topic | Development Finance |
| url | http://hdl.handle.net/11427/29036 |
| work_keys_str_mv | AT makhwathaalexsimeon theimpactofpublicspendingonroadsinfrastructureonmalawiseconomicgrowth AT makhwathaalexsimeon impactofpublicspendingonroadsinfrastructureonmalawiseconomicgrowth |