TITLE:
Public Expenditures, Private Investment and Economic Growth in Togo
AUTHORS:
Koffi Yovo
KEYWORDS:
Public Expenditures, Private Investment, Economic Growth
JOURNAL NAME:
Theoretical Economics Letters,
Vol.7 No.2,
February
27,
2017
ABSTRACT: This
paper assesses firstly the impact of the level and the composition of public expenditures on growth and secondly the link
between public investment and private investment in Togo. For this purpose, a
neoclassical growth model and a private investment model were estimated using
Two-Stage Least Squares. The findings highlight that during the period
1980-2013, the composition of public expenditures, contrarily to the level, had
significant effect on economic growth. In
fact, the public consumption had a negative impact whereas public
investment had a positive impact on growth. Moreover, the study finds out that
increasing public expenditures involves crowding-out effect on private investment. In the light of the results, the paper
invites the Togolese government to
change the composition of public expenditures by giving priority to the investment with careful arbitrage between private
and public expenditures.