CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Overtime, public expenditure has always been a lubricant in physical and human capital formation. Government has the obligation of protecting and providing basic amenities for the citizenry (Abdullah, 2010). The protection function includes establishment of the rule of law, enforcing and protecting the rights of the citizenry in order to avoid crime cases. The provision function involves basic amenities like stable power supply, good transportation network, good health facilities, quality education, agriculture, etc. philosophers like Hobbes and Locke predict how dreadful the society would have been in the absence of government (Devarjan, Swaroop and Zou 2006). Economic theory pointed that it is not really about the size of the government, but what matters most is the cost and the benefits of the resources allocated; to determine whether the allocated resources either increases or decreases the state of the economy. Public expenditure is a basic economic policy that immensely contributes to the sustainable development of the economy.
For instance, the expenditure on education, health, infrastructure like road, communication, and power improves the productivity of labour and increase the growth of national output. Furthermore, scholars like Abdullah (2010) and Cooray (2009) summarized that a well mapped out and implemented expenditure contributes positively to the economic growth of a country. Through an investigation that was carried out on the fiscal operation of Nigeria, it was discovered that education is grouped under social and community services sector; thus, making education a public good which is a means to an end (Orubu, 1989). The core benefit of education is tied towards understanding, controlling, altering and redesigning of human environment (CBN, 2000). Education improves quality of living- health, productivity and chance of getting a good job (Anyanwu et al., 1999). Education and development are interrelated has pointed out by Ola (1998: 14) “If you see any economy that is not doing well, find out what is spent on education”. That is the reason why scholars such as psacharopoulos (1973), Combs (1985) and Aboribo (1999) reiterated that an increase in per capita income and in the nation’s GDP is due to education and observable differences amongst nations lies in what was allocated to their human development. No wonder the ‘Asian Tigers’ in the last three decades allocated about 25-35% of their annual budgets to their education sector (Aboribo, 1999:61). In most developing countries, providing basic education is the first priority of the government. Education is a right and a responsibility for everyone without limitations (Anyanwu et al., 1999).