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A Bayesian analysis of government expenditure in Nigeria

Olayeni, Olaolu Richard (2009): A Bayesian analysis of government expenditure in Nigeria.

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Abstract

This paper examines the productivity of government expenditure. It adopts a Barro-type production function to chart out a growth model that accounts for the productivity of government spending and also adopts Wagner’s hypothesis to account for endogeneity resulting from fiscal expansion. The model is estimated via the Bayesian technique using the data on Nigeria. The result shows that government expenditure was unproductive in Nigeria and that this conclusion is independent of the macroeconomic environment. Neither is it dependent on the external circumstances. The paper concludes that there is need for urgent budgetary evaluation and close monitoring of the government budget in Nigeria.

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