Government Expenditure, Economic Growth and Human Development - International Review and Additional Insights

Public finance emphasizes economic policy issues to facilitate desired economic growth in countries all over the world. Government expenditure is the strategic process by public authorities for social welfare. The international economic literature is showing different viewpoints for the association among government expenditure and economic growth. There are two major schools of thought having opposite conceptual frameworks: on one side Wagener's school of thought explained that economic growth is the principal determinant for an increase in the relative growth of public sector expenditure in the economy. On the other side, government expenditure is the most significant instrument for ensuring growth in the economy as per Keynes's hypothesis. Accordingly, government expenditure is the key aspect that has a vital role in the course of the economic growth of any nation. Whereas, the new emerging dimension explains the visionary aspects of government expenditure that is not only to ensure economic growth alone but to ensure human development as well. Human development is the new concept for advancing human wellbeing and it is a qualitative phenomenon accepted worldwide. The major goal should have to achieve the desired levels of human development. Hence, government expenditure in the economy should regulate the distribution of income in order to achieve economic efficiency and to ensure human development at large.