Government Budgets and Social Development in Africa: Moderating Effect of Government Effectiveness

Abstract

This study investigates the relationship between government budgets and social development in Africa, considering the moderating effect of government effectiveness. Using data from Human Development Reports and World Bank, we employ the Difference Generalized Method of Moments (DGMM) estimation technique. The findings reveal that past HDI levels significantly influence the present, while government budgets, and the interaction between government budgets and government effectiveness negatively impact human development index. Economic growth positively affects HDI, but larger population sizes pose challenges. The study underscores the importance of strategic budgetary allocations, targeted governance reforms, and holistic development planning. The study enriches the discourse on African social development by addressing critical gaps and offering actionable insights for policymakers, researchers, and international organizations committed to achieving sustainable social development in the region.