Sectoral public investment on economic growth

Abstract

The purpose of this study was to find out the impact of sectoral public investment on economic growth in Kenya. This paper uses a Vector Autoregressive (VAR) Model to analyze the impact of sectoral public expenditure on economic growth. Time series data from the Kenya Bureau of Statistics and the World Bank Development Indicators for the period 1964-2014 was used. The study finds a long run relationship between aggregate government expenditure and economic growth. The sectoral analysis indicates a positive impact on public expenditure in infrastructure on economic growth whereas a periodic negative and positive impact on economic growth as a result of public expenditure in public administration and defense and education.