The Effect of Private Investment on Public Expenditure in the CFA Franc Zone
Emmanuel Blaise Efon Ngouo *
University of Dschang, Cameroon.
Luc Nembot Ndeffo
University of Dschang, Cameroon.
*Author to whom correspondence should be addressed.
Abstract
This paper investigates the effect of private investment on public expenditure in the CFA franc zone during the period 1980-2015. To attain this objective, the methodology adopted is the system Generalized Method of Moments (GMM). The result shows a positive and significant effect of private investment on public expenditure. This result thus justifies that private investment is an important source of increase in public expenditure. This result implies that public policies for improving private investment should be promoted: improving the business climate, improving the quality of institutions, ameliorate political environment, fight against terrorism ravaging part of Africa including Mali.
Keywords: Private investment, public expenditure, CFA franc zone, generalized method of moments.