How Does Government Spending Efficiency Affect Human Development in Africa?

Abstract

ABSTRACT The performance of any government is evaluated by how well its citizens are doing and how the government makes use of resources available to guarantee that they are sufficient to ensure fundamental capabilities. Meanwhile, achieving a given human development that guarantees a meaningful living is a challenge of time and a threat to most countries, mainly African countries. Therefore, this study investigates the relationship between government spending efficiency and African human development. The analysis relies on Keynesianism postulations and adopts second‐generation estimation techniques. Results show that higher efficient government spending increases human development. Furthermore, disaggregating the sample into resource‐rich and non–resource‐rich African countries reveals that the abundance of natural resources has not been managed well enough to improve human development in Africa. The explanation of endowed resources in Africa can be described as the resource curse hypothesis, which affects human development. More specifically, rationalising government resources without jeopardising spending quality is a better enabler for human development in Africa. The study concluded that government spending efficiency spurred human development in Africa.