Abstract

The literature analyzes the relationship between public expenditures and GDP growth in localities of Vietnam. The research sample includes data on public expenditures and GDP of 63 provinces/cities of Vietnam during the period 2013 - 2015. The results of the research by backward regression method have confirmed the orthodromically directly proportional relationship between components of public expenditure, but not the total public expenditure, and GDP growth in provinces/cities of Vietnam. Specifically, public expenditure on development investment and the one on social and economic services contribute significantly and positively to the economic development of localities. On this basis, we propose some relevant recommendations to state agencies in establishing constitution for cutting down expenditures; strengthening estimate, public debt management performance; as well as measures to attract investment to contribute to fulfilling the tasks of industrialization, modernization in the era of global integration today.

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