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Title GOVERNMENT EXPENDITURE PATTERN AND INVESTMENT BEHAVIOUR IN GHANA: FROM THE ABYSS INTO RECOVERY
Full text http://dspace.knust.edu.gh/dspace/handle/123456789/754
Date 2000
Author(s) OHENE-MANU, J.
Abstract The significance of Ghana's policy of Economic Recovery Programme (ERP) in stimulating gross investment and thus structurally shifting the economy away from the abyss of the pre-policy period was on course. Among the policy packages under the ERP included the use of realistic and flexible exchange rates, financial and expenditure reforms in the public sector, restrictive monetary credit measures and interest rate and investment code review to stimulate private and foreign sector activity. All these were purported to have significant effects on macro-economic variables. Within the policy framework of the ERP the present study concludes on the basis of empirical evidence that investment behavior in Ghana, during the two decades beginning 1970, wars dictated by output curd government expenditure considerations. Apart from the general reinforcement due to government expenditure as a whole, the empirical results also show that the functional pattern or structure of government expenditure impacted differently on investment Government expenditure component related to human capital factors such as health, general administration and defence (and not excluding education) positively influenced investment. But government expenditure on community services as well as economic services tended to adversely affect gross investment. In a way, therefore, it is suggested that the ERP essentially mapped out the course towards human capital formation with its attendant longterm benefits. These conclusions have rich implications for fiscal, monetary and mixed policy decision, in terms of the management of the menu of government expenditure patterns for achieving macro-economic goals.
Publisher KNUST
Identifier 0855-0395
Repository Kumasi - Kwame Nkrumah University
Added to C-A: 2010-02-23;08:57:26