INSTITUTION AUGMENTED WAGNER’S LAW: EMPIRICAL EVIDENCE FROM AFRICA

Abstract

This paper appraises the existence and validity of Wagner’s Law in its quintessential baseline
model and in the presence of some consequential macroeconomic and significant governance
indicators for 52 African countries over a period of 2002 to 2016 in a panel data framework.
Results are indicative of the validity of Wagner’s Law with a statistically significant model.
The macro-economic indicators, financial development, trade openness and population
growth show a diversified impact on the size and role of the government as control variables
acting upon the economic development. Qualitatively, the governance indicators are found
significant in the determination of increasing or decreasing government expenditure.
Therefore, the improvement in governance and strengthening institutions is the last resort for
compound problems and necessities the institutional reforms to upgrade the political
instability, regularity quality, checks the corruption and violence