Government Expenditure and Economic Growth in Nigeria: Historical, Theoretical and Empirical Perspectives

This study follows a reversal of the Wagner Hypothesis as Government expenditure is used as a function of Economic Growth and adopts the ex-post facto research design. The datasets used in this work are annualized time series and purely secondary data drawn from World Bank databank. It covers a 35year period, 1981 to 2015. In addition to the classical linear regression analyses, diagnostics tests were done to ensure validity and reliability of the results. Descriptive statistics, correlational analyses were employed in addition to the traditional unit root tests which confirmed the stationarity properties of the series under study and also determine the model form adopted. The result shows that Economic growth is a significant function of capital expenditure as By way of policy implication, it is recommended that public expenditure should be directed in a manner that engineers economic growth given the functional relationship discovered in this study.