IMPACT OF GOVERNMENT FISCAL INTERVENTION ON NIGERIA’S ECONOMIC GROWTH

Abstract

One of the main issues in the Contemporary macroeconomic literature is the degree to which the government should intervene in the economy.   Laissez-faire market economists argue that government interference should be strictly limited as government intervention tends to cause an inefficient allocation of resources. However, others argue that there is a solid reason for public involvement in various areas, such as externalities, public goods and monopoly power. This study, therefore investigates the impact of public intervention expenditure (capital and recurrent expenditure) on economic growth. This article adopted the Autoregressive distributed lag (ARDL) model for data analysis. The outcomes showed that government intervention through capital expenditure stimulates the economy and has an optimistic and significant impact on economic growth, in both short and long terms.  The study therefore, advocates that government ought to increase public spending on prolific projects that directly improve the standard of the living and should always intervene to ensure that societal desirable outcomes are achieved.