Thesis (Ph. D.)--Ohio State University, 1987. / Includes bibliographical references (leaves 132-145). Available online via OhioLINK's ETD Center.

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Thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy, in the Faculty of Commerce, Law and Management, School of Economic and Business Sciences. 27 March 2019 / This thesis investigates the role of institutional quality on the impact of government expenditure on economic performance. The thesis consists of five chapters. Chapter 1 provides an introduction of the thesis. Chapters 2, 3 and 4 are empirical chapters examining the role of institutions on the relationship between government expenditure and various indicators of economic performance. Chapter 5 concludes by giving policy recommendations. In chapter 1 we provide a background, motivation, objectives, hypothesis to be tested, gaps in the literature, contributions of the study and the main findings. In chapter 2 we explore how institutional quality affects the government spending-output growth nexus. We estimate a modified growth accounting model found in Hansson and Henrekson (1994) and control for institutional quality by employing panel regression techniques on a panel of 71 countries over a period 1970-2015. Our main estimation technique, 3SLS with seemingly unrelated errors, is able to control for endogeneity and cross equation correlation. We find that the institutional quality variable has a mitigating effect on the relationship between government expenditure and output growth however, government expenditure generally has a negative and detrimental effect on output growth. This suggests that better institutional quality offsets the adverse effects of government expenditure. As such, there is a need to come up with policies that strengthen institutional quality and enhance the effectiveness of government expenditure programs. Chapter 3 we examine the role of institutions on the optimal size of the government. The quadratic method of Armey (1995) and Scully (1994) method are employed on the country (time series regression) and group (panel data regression) estimations. Furthermore, we use the Hansen (1999) panel threshold regression technique to determine the presence of an optimal size and the values thereof. We ascertain that the majority of countries do have a significant optimal size of government. However, we note that the optimal size of government varies across countries and regions. Despite the presence of a non-linear relationship between government expenditure and output growth, there seems to be a marked difference between the size of government across levels of development and institutional arrangements. Countries with better institutions and higher levels of development seem to have a lower optimal level of government size. Perhaps, better institutions and higher levels of development help mitigate the adverse effects of government expenditure on output growth through the minimisation of the scope and scale of government activities, i.e., government size. Chapter 4 investigates the Twin Deficits Hypothesis (TWDH) and the role of institutional quality on a sample of 48 countries for the period 1995-2013. Using the national income accounting decomposition and the approaches in Feldstein and Horioka (1980) and Fidrmuc (2003) we investigate the role of institutional quality and capital mobility on the current account deficits and the government budget deficits (i.e., TWDH) nexus. We apply OLS, fixed effects, random effects regressions and panel cointegration techniques in our analysis. The results from the panel cointegration tests show that a long run relationship exists between the current account balance, investment and the government budget balance. The results reveal that current account deficits are mainly driven by private investment flows. However, we only find support for the Twin Deficits Hypothesis in a sample of developed countries and higher institutional quality countries. The results imply that governments of these countries enjoy financing from international sources and can easily finance their budget deficits without siphoning domestic savings away from investment. This result is unsurprising considering that capital seems to flow towards areas with perceived less risk. This suggests that current account deficits in developing countries are as a result of private agents’ decisions and not driven by government budget deficits. / PH2020

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published_or_final_version / Public Administration / Master / Master of Public Administration

M.A. (Public Management and Governance) / This study sought to assess the main outcomes of the 2003 Maputo Declaration encapsulating the political decision of the Heads of State of the Organization of African Unity (OAU), within the framework of the Comprehensive Africa Agriculture Development Programme (CAADP), to allocate at least 10% of national public budgets to the agriculture sector. The scope of the assessment included the levels, composition, efficiency and effectiveness of public expenditures in the agriculture sector. For this reason, the study not only sought to find out the calibration of the levels and quantities of resources allocated to, or spent in the agriculture sector, but also undertook a diagnosis of the composition and patterns in resource allocations and expenditures in the agriculture sector. The study, designed in form of an exploratory and pilot research, was conducted in two African countries (Rwanda and Malawi) and adopted an orientation towards discovering ideas and insights – not for purposes of coming up with final answers or decisions, but rather for providing a better understanding of the situation to inform the construction of larger research efforts. Specifically, the study aimed to: i) determine the patterns in public agriculture allocations and expenditure after the Maputo Declaration; ii) to identify the factors that determine or influence the levels and composition of budgetary allocations and expenditure in the public agricultural sector. From the population frame comprising all 54 member states of the African Union, a purposive stratified sampling method was employed to select the two countries. A judicious blend of qualitative and quantitative methods and attendant techniques was employed in data collection and analysis. Qualitative information was collected largely using a literature review and participatory research methods, such as semi-structured interviews with key informants. On the other hand, quantitative information was collected using a suite of methods and tools, such as simple questionnaires administered among specific country respondents. Anecdotal evidence drawn from literature review showed that Malawi allocates well above the 10% CAADP target for its national resources to agriculture, while Rwanda, in spite of being the first country on the continent to sign the CAADP Compact, allocates less than 10% of its public resources to the sector. The research, undertaking a deeper analysis revealed that Malawi exhibited consistent increases in the percentages of agricultural expenditure as a share of the national expenditure for the entire period under study (2000 to 2013), except in 2002/03 and in 2008/09. In fact, there is evidence that Malawi spent over 30% of its national resources on agriculture, although this percentage declined to 24.7% in the subsequent year. Most of Malawi’s expenditure is explained by the thrust that the government had placed on farm-input subsidies. It is also noteworthy that a significant proportion of Malawi’s agriculture budget (about 80%) is funded by external donors. The research revealed that the expectations of agriculture’s contribution to the growth and development of the national economy forms part of the major explanations behind the gigantic proportions of the national budget allocated to the agricultural sector. This is consistent with findings of another study that showed that show that agricultural-led economic growth has a greater impact on poverty reduction than does the same level of growth driven by non-agricultural sectors. Rwanda exhibited clearly different trends in agriculture expenditure from those exhibited by Malawi; with the exception of a spike recorded in 2001-2002, the subsequent periods all the way to the year 2006 show a consistent decline in expenditure. This study revealed that the share of agriculture expenditure in the national total fell from 8.6% recorded in 2002 to 3.3% in 2006. The patterns in agriculture budget allocations and public expenditure in Rwanda continued to drop and, in the best case scenario, the allocation patterns stagnated. The reasons for the drop before 2007 are unclear. However, Rwanda registered a consistent rise in public expenditure in the agricultural sector after 2007, both in absolute and relative terms. It is recalled that Rwanda was the first country on the continent to sign the CAADP Compact in 2007.

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This study concerns itself with the process of public sector resource allocation in Canada from 1965-1975. An examination of the Federal Government's own procedure manual for program evaluation, and the analysis of several program evaluations for Departments of Health, Education and Manpower, reveal that the analytical procedures and economic precepts used depart significantly from accepted norms of economic theory. Consequently, the rates of return claimed for these programs are distorted and, where they are used for the rationing of public sector resources, collective welfare will not be optimized. The major causes of these problems are improper analytical methodology and the failure to adhere to basic economic principles of resource allocation. Support for this hypothesis derives from accepted economic theory with respect to welfare maximization and the allocation of public expenditures.

The Government of National Unity, on coming into power in April, 1994, has endorsed the reconstruction and development programme (RDP) and its broad agenda for the rapid removal of the problems and gross inequality evident in all aspects of the South African society. Many economists argue that the sustain ability of the RDP, will depend crucially on the maintenance of fiscal discipline and the progressive reduction of the overall fiscal deficit. As excessive fiscal deficits are often associated with higher inflation, higher real interest rates, balance of payments disequilibrium and lower economic growth, thereby putting the RDP at jeopardy. The view based on the Ricardian Equivalence approach however, takes the position that neither deficits nor the way they are financed, is as critical to economic policy and the future prosperity of an economy, as is generally believed. The Ricardian view consequently, argues that government need not necessarily embark on deficit reduction programmes as advocated by the so called traditional view. The study investigates the validity of the Ricardian view, both on the empirical and theoretical side, with special reference to the South African economy. The specific question that this study attempts to address is whether economic agents behave in a Ricardian manner in the South African economy. Our results (based on the replication of the Dalamagas (1994) study) could be very consequential for South African policy makers, as they suggest that the Ricardian Equivalence proposition is valid and therefore, government could on purely theoretical grounds shift its focus away from the debt situation, and concentrate on the policies aimed to correct the inequalities (in wealth, distribution of public goods, employment opportunities) created by the Apartheid era. Whether government should do so in reality however is debateable due to the other considerations that government need to take account of when implementing actual macroeconomic policy. / Thesis (M.Soc.Sc.)-University of Natal, Pietermaritzburg, 1998.

The dissertation reviewed "the causes of war debate in Africa, and its implications for African military expenditures" by levelling the argument of greed hypothesis as inconsistent with the pragmatic ground situation in Africa that can properly inform optimal decision-making. The arguments raised support the debunking of greed claim that opportunity to pillage state resources, supersedes issues of grievance as cause of civil war. This work discussed the major civil wars in Sub-Saharan Africa since 1990, the study raised concerns that, by taking stance with greed has the tendency to make traditional state security the utmost policy concern. That also provides cost benefit excuse for state actors to give milex priority over other social sectors in budget prioritizing. It is argued that greed does not offer the platform for durable peace pursuit. The dissertation then showed that grievance is consistent with causes of civil war in Africa due to its multifarious outlook of conflicts. Grievance hypothesis, is supported because it offers practically approach to pursue endurable conflict, and problem solving approach to conflict analysis in Africa. Grievance encourages a policy of milex reduction and encourages peacebuilding effort. The study concluded by saying that none of the debate grievance and that of greed's validity justify the heinous carnage and destruction involved in African civil wars. Therefore what compels leaders to find solution with violence as a result of opportunity not based on resource per se, but it also involves misplaced priority to find lasting solution to grievance issues. It also involves the opportunity to heroism based on distorted perception of power and lack of social education on appropriate means to conflict resolution, and lack of appropriate early warning mechanism and trivialization of conflict warnings as happened in ECOWAS, East-Central Africa. Nine recommendations suggested in the dissertation centres on the causes of new civil wars debates and policy; the study of cases of new civil wars in SSA; and on the influence of new civil wars debate on milex. / Thesis (M.Com.)-University of KwaZulu-Natal, Durban, 2007.