The Effect of Public Expenditure on Sustainable Economic Development in Sub-Saharan African: System, Generalized Method of Moments (GMM)“ Estimation Technique

Abstract

In Sub-Saharan Africa, failure in achieving sustainable economic development and ineffective public expenditure management have become a serious problem. This study was undertaken to address a gap in previous research, which examined the economic effects of public expenditure without considering the sustainability dimension. It examines the effects of public expenditure on sustainable economic development (SECD) in sub-Saharan Africa using the annual data of 35 states during the period of 2008-2022. The research used the “Dynamic Panel, SystemGeneralized method of Moments (GMM)” estimation technique to examine the effect of predictor variables on the out-come variable. The results revealed that increase in public expenditure in the military, and agriculture sectors negatively and significantly affected sustainable economic development in SSA, whereas expenditures in health and education expenditure have a positive and significant effect. In sub-Saharan Africa, for military, health and education expenditures, sustainable development theory is supported, whereas for public expenditure in agriculture the theory sustainable development does not hold true. Thus, based on the study findings governments in the study area are suggested to shrink and redirect military and agricultural expenditure and intensity spending in human capital development (health and education spending).