Impact of Public Investment on Economic Growth in Benin: Case of the Rural Sector and Infrastructure

Hortensia A V

Published on: 2019-09-10

Abstract

In the current framework of consolidation of public investments in the UEMOA States, particularly in Benin republic and in the extension of the reflections relating to the factors of economic growth. The role of public investment in achieving economic growth should be questioned. Public investments remain a privileged tool that promotes recovery economic. They induce job creation, contribute to growth, and improve the living conditions of the populations. The study analyzes the influence of public investments on economic growth in Benin, in other word the direct effect of public investment on growth. For this purpose, a time series analysis using ARDL modeling developed by Pesaran on data relating to the Beninese economy covering the period from 1989 to 2016 was carried out. The results show that: the state invests heavily in operating expenses; public investment as a whole has a negative influence on long-term growth. Investments in the rural and infrastructural sectors are strongly encouraged given their positive effect on long-term growth in Benin.