Determinants of Government Expenditure in Botswana

This study examines the debate about the growth of government expenditures in Botswana. The study outlines the pattern and rate of government expenditure growth and then presents some empirical findings on the determinants of government expenditures in Botswana during 1980-2000. Previous studies on government expenditure growth in developing countries have identified the determinants of the growth to be expenditures on social welfare, the openness of the economy and growth in military spending. The variables employed in the present study are: national income, the level of monetization, openness of the economy, government revenues and expenditures on social services. The empirical results of this study show very high explanatory power of the model. All the variables have the expected signs. The results show that national income, the openness of the economy and the expenditures on social services are the significant variables that determine the growth of government expenditures in Botswana. The findings show that, statistically, expenditure on social services is the most significant determinant of government expenditure growth in Botswana.