The study examined the effect of public expenditure on human development in Nigeria. The Autoregressive Distributed Lag (ARDL) model was used in the study to assess both short-term and long-term impacts using annual time series data from 2003 to 2024. The presence of long- term correlations between the variables was ascertained using the Bounds Co-Integration Test, and the model's robustness was increased through the application of supporting tests such unit root analysis. The results showed that recurring spending has a short-term negative impact on HDI but a long-term positive and statistically significant impact, indicating that its advantages need time to manifest through institutional stabilisation and service delivery. On the other hand, it was discovered that capital expenditure had little effect on HDI, reflecting challenges such as weak project execution, corruption, and inefficiencies in public investment management. The results highlight that the quality, efficiency, and composition of expenditure matter more than its size in driving human development outcomes in Nigeria. The study recommends that the government should strengthen fiscal discipline, enhance efficiency in recurrent spending, and prioritize targeted capital investments in education, healthcare, and infrastructure to improve long-term human development outcomes.
Orshi et al. (Mon,) studied this question.
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