Impact of Public Consumption on Economic Growth

Abstract:

Faced with the financial crisis and global economic recessions, Africa governments have rediscovered the importance of economic policy instruments. They use it to rescue the bankrupt banks, and to make more economic activity to carry back recession. But now there's a backlash demanding that the deficits used to create the stimulus must be reduced by cutting public consumption spending on a grand scale. Hence the target of this study is to explore the role of public consumption expenditure on economic process in East African geographic region. The study will use panel ordinary least square estimation technique to attain the study objective. The study has identified consumption expenditure to be negatively associated with growth. This study recommends few funds should be channeled to public consumption programmes and sectors.