ASSESSMENT OF DETERMINANTS OF FISCAL POLICY IN NIGERIA (1980-2014)

Abstract

This study examined the determinants of fiscal policy in Nigeria (1980-2014). To do this, it reviewed government expenditure as a determinant of fiscal policy in Nigeria. The study adopted Ordinary Least Squared Method in its analysis using data from Central bank of Nigeria statistical bulletin. This study made use of secondary data to assess the determinants of fiscal policy in Nigeria. It reviewed the Keynesian theory of fiscal policy and the classical view of government expenditure. It also reviewed the Peacock-Wiseman theory and Wagner’s theory. In this study, the descriptive statistics of the variables indicate that all the variables, GOVEXP, GDP, LABFORCE, REVENUE,POPU, INVEST,TRANSFER and INF have positive mean values with 35 observations. The standard deviation showed that the highest standard deviation of (9794981) is recorded by the GDP while the least standard deviation of (0.231467) is recorded by INVEST. The kurtosis coefficients showed that three of the variables are leptokurtic, two variables, are mesokutic while three of the variables are platykurtic. The unit root test result indicates that all the variables under consideration, all the variables are stationary and integrated of order one at 5% level of significance. The result from this study shows that government expenditure had positive relationship with Gross domestic product, investment, inflation, labour force during the period under review. it is recommended that the government should increase her expenditure so that there will be increase in the investment which will lead to increase in GDP of Nigeria.