Rising Government Expenditures and Standard of Living in Nigeria: An Ardl Bound Test Approach

Abstract This study investigated the nexus between standard of living proxy by per capital income (PCI) and the rising four components of capital and recurrent expenditure namely: Administration (ADM), Economic Services (ECS), Social and Community Services (SCS), and Transfer Payments (TRP). The study used data from the Central Bank of Nigeria Statistical Bulletin, 2018 and World Development Indicator, 2018 for the period 1981–2018, using Autoregressive Distributed Lagged (ARDL) Bound Test Approach. The study found that rising government expenditures on these four components of both capital and recurrent spending were negatively and insignificantly related to PCI, those that were positively related were also insignificant, indicating low standard of living of Nigerians during the period of study. We concluded that government expenditure did not improve the standard of living of Nigerians significantly. The study recommended that political officers should always ensure integrity and accountability in handling public funds.JEL CLASSIFICATION: F31, C01, C13, C32, C51