Disaggregated Government Spending on Infrastructure and Poverty Reduction in Nigeria
This study examined the relationship between government spending on infrastructure and poverty reduction in Nigeria. Per capita income was used to proxy poverty reduction, government spending on infrastructure was proxied by; government spending on building and construction, government spending on transportation, government spending on education and government spending on health. Time series data of 43 years were employed and Augmented Dickey Fuller unit root test showed that the variables were not stationary at level but were stationary at first difference the order of integration was I(1). The lag length as selected by Vector Autoregressive model was one. Vector Error Correction model showed that there was a long run relationship between government spending on infrastructure and poverty reduction in Nigeria. The regression result showed that government spending on building and construction has a positive and significant effect on poverty reduction in Nigeria, while government spending on transportation has a negative and significant effect on poverty reduction. The effect of government spending on education and health were insignificantly negative and positive respectively. It is recommended that the government of federal republic of Nigeria should increase spending on building and construction as poverty reduction responds to it brilliantly well.
