Public Government Spending and Economic Growth in Latin America and the Caribbean

This paper investigates how government public spending impacts economic growth among multiple Latin American and Caribbean countries of varying developments since the 1990’s. The study incorporates variables including GDP per capita and general government final consumption expenditure to analyze their contributions to the economy. Data was collected from the World Bank Group. Previous empirical studies have looked at developed countries including multiple variables, while this study has a focus on economies of varying sizes and investigates government public spendings independently. This study will add to existing literature by inspecting public spending from a micro view at the public government spending level, which can then allow for cross comparisons. The results show that while some of the countries examined found cointegration and causality between public government spending and economic growth, most countries in Latin America and the Caribbean have inefficient government spending, which results in a lack of connection between the two variables studied.