Spend, spend, spend? Is public spending a good thing for the Tanzanian economy?
Josaphat Kweka| Oliver Morrisey /

Does government spending enhance economic growth? The evidence supporting a significant relationship between the two is mixed. The impact of increased spending differs from country to country depending on the economic environment and on a particular government's budget allocation to each sector. Research has thus tended to split such expenditure into two strands: productive or investment spending which has a positive effect on economic growth, and non-productive or consumption spending which has a detrimental effect on growth. Researchers from the University of Nottingham have attempted to establish which category should be considered productive and which non-productive in the case of Tanzania.