Government Spending and National Income Nexus for Nigeria

The paper investigates Wagner's law, the nexus between government spending and national income in Nigeria over the period 1961-2009 in multivariate framework incorporating population size variable. The results provide support for Wagner's law in Nigeria. Moreover, there is a long-run relation among real government spending, real GDP and population size. A unidirectional causality runs from both real gdp and gdp per capita to government spending implying that expenditure rationalization policies may not necessarily have adverse effect economic growth. Finally, population has significant positive impact on government spending