Analysis of government expenditure in driving economic growth in Zimbabwe between 1980 and 1998

Date
2011-11-10
Authors
Shumba, Jabusile Madyazvimbishi
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Abstract
Since 1980, the Zimbabwean economy has not performed well, characterised by averagely declining levels of growth and often recording negative economic growth in some years. Various explanations have been provided by different scholars including statism (Midgely, 1987; Gilman, 2006), excessive government spending (Fan and Rao, 2003), poor economic governance and a series of ‘wrong’ policy choices (Gilpin, 2008). This research attempted to analyse the role of public spending in driving economic growth over the period. The study focused on determining the resource allocation to the three sectors of the economy (safety and security, social and economic), identifying and classifying some programmes and projects implemented by government according to the sectoral criteria of safety and security, social and economic, as well as analysing the nature of the spending between operational and capital investment over the period 1980 to 1998. The chosen data was collected and analysed from secondary sources mainly budget statements, Government of Zimbabwe Socio-Economic Review documents and macroeconomic policies. The study found that declining capital investment, increasing recurrent expenditures, largely dominated by huge defence budget and transfer payments, were among factors that reduced the influence of government expenditure in driving economic growth in Zimbabwe. Key recommendations were drawn for Zimbabwe to institute budgetary reforms by reducing large defence spending and size of the public sector, and direct limited fiscal resources towards the economic sector through capital investment, human capital development and knowledge processes as the imperatives for sustainable long-term growth
Description
MM thesis - P&DM
Keywords
Economic growth, Zimbabwe, Government expenditure, Zimbabwe
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