The Effectiveness of Public Sector Government Expenditure on Economic Growth

Abstract

This study aims to analyze the effectiveness of public sector government expenditure on economic growth in the global context over the past five years. Using a literature review approach, the study examines theoretical perspectives and empirical findings related to public spending across key sectors, including education, health, infrastructure, agriculture, and transportation. The results indicate that government expenditure exerts a positive impact on economic growth when it is efficiently allocated, strategically planned, and supported by transparent and accountable fiscal governance. Expenditures on education and health have been shown to strengthen human capital and enhance labor productivity, while investments in infrastructure improve economic connectivity, reduce distribution costs, and stimulate industrial activity. Conversely, inefficient or poorly targeted spending can create fiscal distortions, increase budget deficits, and weaken the long-term effectiveness of economic policies. Therefore, the success of fiscal policy depends on the synergy between budget efficiency, public accountability, and sustainable financing to promote inclusive, stable, and long-term economic growth.