Abstract
This study has examined the effect of public expenditure on economic in Nigeria for the
period 1970 – 2009. The tool of analysis was the OLS multiple regression model specified on
perceived causal relationship between government expenditure and economic growth. The
major objective of this paper is to analyze the effect of public government spending on
economic in Nigeria based on time series data on variables considered relevant indicators of
economic growth and government expenditure. Therefore, time series data included in the
model were those on gross domestic product (GDP), and various components of government
expenditure. Analysis was based on data extracted from the Statistical Bulletin of the Central
Bank of Nigeria. Results of the analysis showed that capital and recurrent expenditure on
economic services had insignificant negative effect on economic growth during the study
period. Also, capital expenditure on transfers had insignificant positive effect on growth. But
capital and recurrent expenditures on social and community services and recurrent
expenditure on transfers had significant positive effect on economic growth. Consequently,
the study recommended more allocation of expenditures to the services with significant
positive effect.
