Public sector educational expenditure and economic growth nexus: An autoregressive distributed lag approach and strategic implication

Abstract

The government has a mandate to provide public goods to the general citizenry. Studies on the effect of government expenditure on economic growth has not yielded concrete results. This paper will try to unravel the role of public educational spending on economic growth in Zimbabwe over the period 1980 to 2018 utilising secondary data. The autoregressive distributed lag (ARDL) model was employed to ascertain the relationship as it has the advantage of handling studies which are short term in nature. Cointegration was established among the independent and dependent variables paving way for results analysis. The study’s results indicate that economic growth is impacted in the long term by educational expenditure in a positive and significant way. Additional factors influencing long-term economic growth include fiscal space, educational expenditure, economic crises, and gross fixed capital formation. All variables, except for gross fixed capital formation, also affect economic growth in the short term. The study suggests that the government should enhance funding for education in accordance with the Dakar Framework for Action (United Nations Educational, Scientific and Cultural Organization [UNESCO], 2020).