Public expenditure and human development in Nigeria in the last decade, composition and distributional impacts

Abstract

Beyond the country-level impact, this study evaluates public expenditure in Nigeria in the last decade based on composition and distributional impacts on human development at the state-level considering education, health, agriculture and rural development water resources energy, housing and environmental protection. Using data generated from 20 states from 2007-2017, the empirical analysis indicates that the efficacy of education, health, agriculture and rural development and water resources in improving human development is greater than that of energy, housing and environmental protection expenditure. More interestingly, the positive effect of capital expenditure is mitigated by increased recurrent expenditure. The combination of these factors strongly reduces the capability of public expenditure to foster human development. Based on the distributional impact assessment model, education, health, agriculture and rural development and water resources has positive marginal impact while energy, housing and environmental protection has negative marginal impact. Together, these results further advance the case for improving expenditure on the components and sectors that enhances human development. In other words, the public policy plays a great role in human development expenditure in Nigeria.