1. GODWIN IMO IBE - Department of Banking and Finance, University of Nigeria, Enugu Campus.
2. ISHAKU PRINCE ABNER - Oil, Gas and Energy Unit University of Abuja Business School, Abuja, Nigeria.
3. AGU OKORO AGU - Department of Business Management, Evangel University Akaeze, Ebonyi State.
This study conducted an empirical analysis of the relationship between public spending, inclusive growth, and governmental institutions in 32 Sub-Saharan African (SSA) countries from 1991 to 2019. The research utilized a two-stepwise Generalized Method of Moments (GMM) estimation approach. The findings indicated that education expenditure and government consumption expenditures had a negative and significant association with inclusive growth, while health expenditure had a positive but insignificant impact on growth inclusiveness. When considering governance as a moderator, without any interacting variables, the effects of the expenditure variables remained largely unchanged. Furthermore, the results demonstrated that the different dimensions of governance had a positive and significant influence on inclusive growth. However, when incorporating interaction terms between public expenditure components and governance dimensions, the findings suggested that regardless of the aspect of governance measured, governmental institutions in SSA countries did not enhance inclusive growth. The paper concluded with a discussion of policy implications based on the research findings.
Public Spending; Inclusive Growth; Governance; Sub-Saharan Africa.