<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Fiscal policy has been used by various governments to promote economic growth. The effectiveness of government expenditure on economic growth depends on recipient sector of government expenditure. This study contributes to this research area by investigating the effect of government agricultural expenditure on economic growth in the Kingdom of Lesotho. The government of Lesotho identified the agricultural sector as a productive sector that is central to the achievement the economic growth goal and development plan. Descriptive statistics and inferential econometric techniques (ARDL, DOLS and VEC Granger causality) over time-series data for the period 1982-2019 were utilized in this study. The results suggest that while current level and pattern of government agriculture expenditure cannot stimulate the desired economic growth and prosperity in the country, domestic investment appear to be a stimulant of the desired economic prosperity. Consequently, any economic growth policy or strategy that is premised on government agricultural sector expenditure would fail. Thus study recommends that countries including Lesotho should prioritize sustained increase in domestic investment.</p>
</abstract>

Fiscal policy has been used by various governments to promote economic growth. The effectiveness of government expenditure on economic growth depends on recipient sector of government expenditure. This study contributes to this research area by investigating the effect of government agricultural expenditure on economic growth in the Kingdom of Lesotho. The government of Lesotho identified the agricultural sector as a productive sector that is central to the achievement the economic growth goal and development plan. Descriptive statistics and inferential econometric techniques (ARDL, DOLS and VEC Granger causality) over time-series data for the period 1982-2019 were utilized in this study. The results suggest that while current level and pattern of government agriculture expenditure cannot stimulate the desired economic growth and prosperity in the country, domestic investment appear to be a stimulant of the desired economic prosperity. Consequently, any economic growth policy or strategy that is premised on government agricultural sector expenditure would fail. Thus study recommends that countries including Lesotho should prioritize sustained increase in domestic investment.

Effect of Government Agricultural Expenditure on Economic Growth: Evidence from a Developing Country

Studia Universitatis Babes-Bolyai Oeconomica

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Fiscal policy has been used by various governments to promote economic growth. The effectiveness of government expenditure on economic growth depends on...

Effect of Government Agricultural Expenditure on Economic Growth: Evidence from a Developing Country

Published Online: Sep 13, 2022

Page range: 1 - 20

DOI: https://doi.org/10.2478/subboec-2022-0006

Keywords
Government Expenditure, Agriculture Sector, Economic Growth, Keynesian Hypothesis

© 2022 Ebenezer Toyin Megbowon et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Effect of Government Agricultural Expenditure on Economic Growth: Evidence from a Developing Country

Published Online: Sep 13, 2022

Page range: 1 - 20

DOI: https://doi.org/10.2478/subboec-2022-0006

KeywordsGovernment Expenditure, Agriculture Sector, Economic Growth, Keynesian Hypothesis

© 2022 Ebenezer Toyin Megbowon et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
Government Expenditure, Agriculture Sector, Economic Growth, Keynesian Hypothesis