Majesty IBOR

This study examines the relationship between government expenditure on education and economic growth using time-series data from 1981 to 2022. Economic growth is measured by real GDP, while government expenditure on education, gross fixed capital formation, life expectancy, foreign direct investment, and exchange rate are included as explanatory variables. The Autoregressive Distributed Lag (ARDL) -Error Correction Model (ECM) approaches is employed. The findings confirm the existence of a long-run relationship among the variables, as indicated by a negative and statistically significant error correction term. In the short run, government expenditure on education has a negative but insignificant effect on economic growth, suggesting delayed growth impacts. Life expectancy exerts a positive and significant influence on economic growth, while gross fixed capital formation shows a negative and significant effect. Foreign direct investment exhibits mixed effects, and exchange rate changes are found to be insignificant. The speed of adjustment indicates that about 92 percent of short-run disequilibrium is corrected annually. The study concludes that effective human capital development is crucial for sustainable economic growth