Public Debt and Government Expenditure: Applied Study on the Palestinian Environment

Abstract

This study aims to identify the effect of public debt on Palestinian government expenditure from the year ‎‎‎1997-2019. An analytical descriptive approach was used. The study found that the public debt positively ‎‎impacts government expenditures and current expenditure, this confirms that the largest proportion of ‎‎public debt is spent on the non-productive consumer aspects without direct concern for the elements of ‎‎real economic production. In addition, the public debt negatively affects the development expenditures, ‎‎which are usually supported by foreign aid and grants. Based on previous results, the researcher progress ‎‎with several recommendations, the most important of which are that the Palestinian Authority should ‎‎rationalize public and private consumption spending, and encourage citizens to invest by making them ‎‎aware of the benefits of directing savings towards investment, financing projects. That is to achieve ‎Palestinian ‎priorities and economic development at the national level and within the main directions of the ‎Palestinian ‎Development Plan while increasing the share of development expenditures. ‎