Government Size and Economic Growth in ECOWAS Sub-Region: A Test of the Non-Monotonic Hypothesis


  • Matthew A. Dada Department of Economics, College of Management Sciences, Federal University of Agriculture, Abeokuta, Nigeria
  • Sunday M. A. Posu
  • Oluseun A. Adedeji
  • Olutunji T. Ojo


This study analysed the statistical properties of government size and economic growth as well as testing the non-monotonic hypothesis in the ECOWAS region following panel analytical procedure. Secondary data on population, unemployment, exchange rate, consumer prices, export, and import of goods and services, aggregated government expenditure and gross domestic product were sourced mainly from World Bank Data Base. Following the non-linear approach, the result of panel least square confirms the non-monotonic hypothesis in favour of U-shaped curve as against an inverted U-shaped (∩) which is a proof of Armey curve scenario. The result also showed that while exchange rate and money supply were not significant, unemployment and import of goods and services significantly contributed to the low pace of economic growth in this economic sub-region. Export of goods and services was found to have positive and significant impact on growth. The policy implication is that while each of the member countries should adhere strictly to the optimal (min) of about 42% as the starting point for a meaningful economic growth in line with Big-Push theory, each country should equally boost export trade; restrict import; and as well tackling unemployment and exchange rate problems for rapid economic growth. The study concluded that the U-shaped non-monotonic relation existed between government size and economic growth in the ECOWAS sub-region.