EFFECTS OF GOVERNMENT SPENDING ON PRODUCTIVE CAPACITY

Résumé

This paper assesses the effect of government spending on productive capacity in Sub-Saharan Africa. Using a sample of 35 sub-Saharan African countries, we estimate a panel data model using the methods of feasible generalized least squares (FGLS) and system generalized moments (GMM-System) over the period 2000-2018. This analysis shows that government spending has a positive and significant effect on the productive capacity of sub-Saharan African countries. This shows that an increase in spending contributes to an increase in productive capacity. Furthermore, our analysis shows that the level of public spending has a positive effect on the economic complexity of sub-Saharan African countries. Indeed, an increase in government spending improves the level of production, and subsequently promotes the diversification of sub-Saharan African economies.