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CHAPTER 1: INTRODUCTION
1.1 The reason for study
The reason for choosing the research topic comes from factual
context and research gap.
The practical context shows that the impact of public expenditure
on economic growth be extremely essential in developing countries.
Although the situation is different, the common denominator in
developing countries is that along with high economic growth, these
countries are facing with increasing public expenditure problems,
large budget deficits and poor public governance.
Literature review shows that the impact of public expenditure on
economic growth in developing countries remains controversial.
Interpretation of the results of the combined test for the economic
impact of public expenditure, some studies point to factors affecting
the impact of public expenditure on economic growth, including:
expenditure structure, how public expenditure is financed, growth
rates, threshold values and the quality of public governance (Afonso
& Jalles, 2016; Gemmell et al., 2012; Halkos & Paizanos, 2016).
Previous papers consider each of these factors individually, so it does
not provide comprehensive empirical evidence on the impact of
public expenditure on economic growth (Halkos & Paizanos, 2016).
Governance is a multidimensional concept (Acemoglu, 2008,
Quibria, 2014).
Accordingly, the subject of the thesis is "Public Expenditure,
Governance and Economic Growth in Developing Countries"
The thesis examines the relationship between public expenditure and
economic growth in budget constraints as well as the role of public
governance in developing countries for the period between 1998 and
