The impact of public spending on roads infrastructure on Malawi's economic growth

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dc.contributor.advisorGossel, Sean Jen_ZA
dc.contributor.authorMakhwatha, Alex Simeonen_ZA
dc.date.accessioned2018-11-07T13:03:39Z
dc.date.available2018-11-07T13:03:39Z
dc.date.issued2015en_ZA
dc.description.abstractPublic 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.en_ZA
dc.identifier.apacitationMakhwatha, A. S. (2015). <i>The impact of public spending on roads infrastructure on Malawi's economic growth</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,Research of GSB. Retrieved from http://hdl.handle.net/11427/29036en_ZA
dc.identifier.chicagocitationMakhwatha, Alex Simeon. <i>"The impact of public spending on roads infrastructure on Malawi's economic growth."</i> Thesis., University of Cape Town ,Faculty of Commerce ,Research of GSB, 2015. http://hdl.handle.net/11427/29036en_ZA
dc.identifier.citationMakhwatha, A. 2015. The impact of public spending on roads infrastructure on Malawi's economic growth. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Makhwatha, Alex Simeon AB - 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. DA - 2015 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2015 T1 - The impact of public spending on roads infrastructure on Malawi's economic growth TI - The impact of public spending on roads infrastructure on Malawi's economic growth UR - http://hdl.handle.net/11427/29036 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/29036
dc.identifier.vancouvercitationMakhwatha AS. The impact of public spending on roads infrastructure on Malawi's economic growth. [Thesis]. University of Cape Town ,Faculty of Commerce ,Research of GSB, 2015 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/29036en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentResearch of GSBen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherDevelopment Financeen_ZA
dc.titleThe impact of public spending on roads infrastructure on Malawi's economic growthen_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMComen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
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