Government spending on education and health drives economic growth in Ethiopia.
The study looked at how government spending in Ethiopia affects economic growth. They focused on spending in education, health, agriculture, and defense. By analyzing data from 1975 to 2019, they found that investing in education and health has a positive impact on the country's economy. However, spending on agriculture and defense didn't show significant effects. The researchers also discovered a two-way relationship between government spending and economic growth in Ethiopia, supporting both Keynesian theory and Wagner's law. This suggests that increasing public sector spending, especially in health and education, can help boost the country's economy.