Public Financial Management and Economic Development in a Developing Country

Abstract

This study evaluates the impact of public financial management on economic development in a developing country. Specifically, the study assesses how public revenue and expenditure influence gross domestic product using time series data from Nigeria for the period 1981 to 2013. The study carries out descriptive analysis and multiple ordinary least square regression tests on the data. The results from the unit root test show that the public revenue, expenditure and GDP series are integrated of order one. The results of the regression model show that public revenue has significant positive effect on economic development in Nigeria. The results further provide evidence to show that the public expenditure does not significantly impact economic development in Nigeria. The study recommends among others that the Federal Government of Nigeria should put in place institutions that will enhance and consolidate prudent public financial management in Nigeria.