The role of government expenditure on environmental improvement : a case study of Egypt

Abstract EN

This paper aims at observing the recent trends in government expenditure on environmental improvement.

In order to achieve this goal, previous studies and more recent ones in particular were reviewed.

Relevant modern terms such as the green growth economy, the circular economy, sustainable development and environmental sustainability were also introduced.

This study concluded that the effectiveness of the role of government expenditure on environmental protection depends to a great extent on governance quality, the actual institutional performance and the public expenditure structure.

This result was further supported by the case study findings.

The case study explored the long term and the short term effects of government expenditure on environment performance in Egypt during the period extending from 1990 to 2017.

The co-integration method was applied via using the autoregressive distributed lad (ARDL) model.

Results revealed a negative impact of per capita government expenditure on genuine wealth per capita (as a measure of weak environmental sustainability) in the long run.

Moreover, the study found a positive relationship between per capita government expenditure and per capita ecological deficit (as a measure of strong environmental sustainability) in the long run.