Analyzing the quantitative impact of public spending on economic growth in Algeria

Abstract

This study aims at determining the impact of public spending on economic growth in Algeria by analyzing the evolution of the public expenditure size and structure in Algeria and measuring the relationship between public spending and gross domestic product during the period 1995-2014. The main results of the study indicate a proportional relationship between the GDP and public spending for each of operating and capital expenditures in the long term, and the flexibility value of the operating expenditures was 0.368, and it has fallen from 0.88 to 0.36 in favor of the capital expenditures; and the flexibility value of the capital expenditures has decreased to 0.406, which is a very significant rise in expenditures reflects the direction of spending policy during the study period, where Algeria has planned an important development programs.