Munich Personal RePEc Archive

Testing Wagner's Law for The Gambia, 1977-2013

Jobarteh, Mustapha (2017): Testing Wagner's Law for The Gambia, 1977-2013.

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Abstract

Wagner’s law relates the positive nexus between public spending and economic activity, where greater economic activity leads to increased public spending. This paper examines the validity of this hypothesis for The Gambia for the period 1977-2013. Using econometric techniques of ARDL bounds test, Johansen and Juselius (1990) multivariate cointegration test, Granger causality and Toda and Yamamota (1995) Granger non-causality tests, the findings show validity for Wagner’s law for The Gambia. Therefore, the government of the Gambia should channel it’s expenditures toward the productive sectors of economy so as to promote economic growth in the country.

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