Impact of recurrent and non-recurrent government expenditure on Bosnia and Herzegovina’s economic growth: an empirical analysis (1996–2022)

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This study aims to investigate the differential impacts of recurrent and non-recurrent government expenditures on the gross domestic product (GDP) of Bosnia and Herzegovina from 1996 to 2022. Aggregating data from various government levels, it employs ordinary least squares (OLS) regression techniques to analyze the relationship between these types of expenditures and economic growth. The findings reveal a significant positive correlation between recurrent expenditure and GDP, indicating that spending on health, education, and security contributes to economic growth. Conversely, non-recurrent expenditure, encompassing capital and development investments, does not show a statistically significant impact on GDP in the short term. This suggests that while recurrent spending is crucial for immediate economic performance, non-recurrent investments require strategic planning and efficiency to realize their growth potential. The study underscores the importance of efficient expenditure allocation in transitioning economies like Bosnia and Herzegovina, highlighting the need for a balanced fiscal strategy that supports both immediate economic stability and long-term development.

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    • Figure 1. Total recurrent and non-recurrent expenditure of all levels of government in Bosnia and Herzegovina
    • Table 1. Adjusted Dickey-Fuller test, unit root properties of data
    • Table 2. OLS model estimation results
    • Conceptualization
      Adisa Omerbegovic Arapovic
    • Formal Analysis
      Adisa Omerbegovic Arapovic
    • Investigation
      Adisa Omerbegovic Arapovic, Amer Kurtovic
    • Methodology
      Adisa Omerbegovic Arapovic
    • Software
      Adisa Omerbegovic Arapovic
    • Validation
      Adisa Omerbegovic Arapovic
    • Visualization
      Adisa Omerbegovic Arapovic, Amer Kurtovic
    • Writing – original draft
      Adisa Omerbegovic Arapovic, Amer Kurtovic
    • Writing – review & editing
      Adisa Omerbegovic Arapovic, Amer Kurtovic
    • Data curation
      Amer Kurtovic
    • Funding acquisition
      Amer Kurtovic
    • Project administration
      Amer Kurtovic
    • Resources
      Amer Kurtovic