EXPLORING GHANA'S ECONOMIC FABRIC: INVESTIGATING GOVERNMENT EXPENDITURE AND FINANCIAL MECHANISMS

Abstract

Government expenditure plays a pivotal role in stimulating economic growth worldwide, as it enables the creation of essential infrastructure and institutional support for a range of economic activities. However, the financing channels used to fund government expenditures significantly influence their trajectory and, importantly, these channels can also interact with each other. The existing literature generally emphasizes that government expenditure should primarily be funded through conventional means, including direct and indirect taxes and non-tax revenues. Nevertheless, in many developing economies, borrowing has become a customary practice to bridge the gap between the required budgetary expenditures and the limited resources generated through conventional revenue sources. This abstract delves into the complex interplay between government expenditure, financing mechanisms, and their implications, particularly in the context of developing countries