Nexus between public educational expenditure and economic growth for selected SADC countries

Abstract

The role of government in financing education is crucial for fostering an educated citizenry that can drive economic growth. This study investigates the relationship between public spending on education and economic growth in selected Southern African Development Community (SADC) countries, highlighting the contentious nature of this relationship in academic discourse. Despite increasing government expenditure on education, challenges such as insufficient infrastructure and outdated pedagogical methods persist, affecting productivity and economic growth. This study employs the Granger causality test and Generalized Method of Moments to analyze the relationship between government expenditure on education and economic growth in SADC countries. The analysis utilizes secondary data from various sources, focusing on the period from 1999 to 2017. The correlation coefficient between educational expenditure and economic growth among selected SADC countries is 0.46, indicating a weak positive relationship. However, the Granger causality test reveals no significant causal relationship between government expenditure on education and economic growth, contradicting findings from other regions. The study concludes that there is no causal link between public spending on education and economic growth suggesting that current educational policies may not align with growth imperatives. It recommends that governments tailor educational curricula to enhance human capital development to improve economic outcomes.