Author(s): Thi Tuyet Minh Ha
Most economists argue that public expenditure is non-productive spending, so an increase in public expenditure can hamper economic growth. Does an increase in public expenditure promote economic growth in ASEAN countries? To answer this research question, the empirically examines the effect of public expenditure on economic growth for a balanced panel data of 8 ASEAN countries (Asean-8) over the period 2000 – 2019 by the panel quantile regression analysis. The robustness of estimates is tested by the FE-IV estimator. The estimated results show that public expenditure promotes economic growth in Asean-8. In addition, domestic investment and infrastructure also stimulate economic growth in these countries. The findings in this study provide some crucial policy implications for governments in Asean-8 in managing and supervising public expenditure to serve for economic development and growth.