Author: Abiodun O. Folawewo and Adeniyi Jimmy Adedokun
Volume: 56 Issue No:2 Year:2014
Abstract: This study extends the empirical literature on the effect of corruption and decentralization on public expenditure by using a panel of the 15 ECOWAS countries, for the period 1996 to 2011. The study in particular investigates the impact of corruption and decentralization on aggregate public expenditure, as well as on public health expenditure. Results from empirical analyses suggest that corruption does not matter in determining the level of aggregate public expenditure. However, corruption has a significant negative effect on health expenditure as a percentage of public expenditure. It is further revealed that corruption has differing effects in non-federal (centralized) and federal (decentralized) countries with regards to health expenditure. The results of the study also show that decentralization lessens the negative effect of corruption on health expenditure. The study also establishes that decentralization has no significant effect on corruption. Finally, it is found that country size (population) has a significant positive relationship with corruption.