CHAPTER ONE

1.1.BACKGROUND OF THE STUDY

In all most all economics today government intervention in undertaking fundamental roles of allocation, stabilization, distribution and regulation, especially where or when market proves inefficient or its outcome is socially unacceptable. Government also intervenes, particularly in developing economics to achieve macroeconomics objective such as economic growth and development, full employment, price stability and poverty reduction.(AESS PUBLICATION 2014).

Public finance is to provide information to all arms of government in other to provide use full data as done for the develop nations that transferred public finance technology to developing nation. Public finance is used for allocation, stabilization and distribution (Musgrave and Musgrave 1989). Public finance is the study of the principle underlying the spending and raising of funds by public authorities (shirras, 1969). It is the field of economics that studies government activities and alternative means of financing expenditure (hymann 1993))

It is a fact that no society though out history has ever attained a high level of economic affluence without a government. Where government do not exist anarchy reigned and little wealth was accumulated by productive economy activity. After government took hold the rule of law and the establishment of private property right often contributed and it has similarly impacted on their societies as well.

Economic growth represents the expansion of a country GDP or outputs. Growth means an increase in economic activities.

Todaro (1995) Citing Kuznets defined a country economic growth as a long term rise in capacity to supply increasing diverse economic goods to is population, this growth capacity based on advancing technology and the institutional and ideological adjustment that is demand. The board objective of this project is the role of government expenditure in economic growth.

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