The causal impact of government education expenditure and poverty reduction in Nigeria: A poverty policing action from 1980-2019
List of Authors
  • Jasman Tuyon, Yusuf Bala Zaria

Keyword
  • Government, poverty, policy, Nigeria, Granger causality

Abstract
  • The research questions the effectiveness of the stagnant policies for poverty reduction in Nigeria. In particular, this research examines the causal and effect relationships between government expenditure on education while controlling for other macroeconomic policies including foreign debt, financial aid, exchange rate, foreign direct investment on poverty reduction in Nigeria. The research utilizes Nigeria’s macroeconomic and poverty rate data from 1980 to 2019. The theory of the multiplier effect underpins the assessment of these macroeconomic variables linked to poverty reduction. The analysis employed Johansen co-integration, error correction and Granger causality to access the cause and effect which means to assess the policy effectiveness. The Johansen co-integration test indicates four significant co-integrations which validated the economic long-term relationships of the variables of interest towards poverty reduction. Assessment on the error correction terms shows negative and significant coefficients of these macroeconomic variables which informed that short-term shocks on these macroeconomics policies significantly influence their determinants on poverty reduction in the long-term. The Granger causality tests indicated most pairs of causality are unidirectional except for debts and financial aid which showed bidirectional causation. These results provide validation of the multiplier effect of these variables on poverty reduction.

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