The role of spending on education and science in sustainable development

Abstract

Azerbaijan is an exporter country of natural resources (oil). Since the main power of modern economy including the future economic progress is human factor, human capital, its knowledge, ability of using technology, transferring oil capital into human capital is a driving factor. That’s why researching the influence of the main indicators of education and state budget allocations for it is a topical issue. The article has researched the relationship of state budget allocation and the main indicators of education and science during 21 years (1996−2017) in the Restate of Azerbaijan. Auto Regressive Distributed Lags has been used as a research model. Besides, stationary tests of variables (Augmented Dickey Fuller, Phillips-Perron, Kwiatkowski-Phillips-Schmidt-Shin) and Pairwise Granger Causality Tests were used. Model stability was studied. Eviews_9 software program was applied for making graphics and calculations. Research has examined that there is a positive dependency between state budget allocation and the main indicators of education. We recommend that state budget allocation for science and education can be increased and used as the intended purpose.