Government Expenditures, Financing, and Economic Growth in Cape Verde | Zendy

Tamoya Christie | Zendy; Felix Rioja | Zendy

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Government Expenditures, Financing, and Economic Growth in Cape Verde

Author(s) -

Tamoya Christie,

Felix Rioja

Publication year - 2014

Publication title -

journal of economics and development studies

Language(s) - English

Resource type - Journals

eISSN - 2334-2382

pISSN - 2334-2390

DOI - 10.15640/jeds.v2n4a1

Subject(s) - cape verde , government (linguistics) , cape , government expenditure , business , finance , economics , public finance , political science , macroeconomics , history , philosophy , ethnology , linguistics , law

In the last 15 years, the economy of Cape Verde has grown steadily and doubled its GDP. Part of this success could be attributed to having one of the world’s highest public investment shares of GDP. However, Cape Verde faces potential challenges due to allocating too much public investment to infrastructure versus human capital formation (health and education) and due to an increase in public debt. Using a two-sector endogenous growth model, we find that reallocating public spending from infrastructure to human capital can have large positive effects on long run growth rates.

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