This paper examines the impact of public spending on ASEAN-5 countries economic development. The purpose of this study is to provide evidence, reference and contribute to the knowledge about government spending and economic growth. This study involves ASEAN-5 countries. The countries are Thailand, Singapore, Indonesia, Philippines and Malaysia. The countries are chosen because there is a lack of study of government expenditure for ASEAN-5 countries using panel data. The data covers from year 1990 to 2014. The data is retrieved from the World Development Indicators (World Bank). The dependent variable is gross domestic product (GDP). GDP is used to measure economic growth. The main independent variable is government expenditure. The other independent variables are gross capital formation, portfolio investment, labor, trade, total reserve and gross savings. A clear understanding about inter-linkages between government spending and economic growth will help the government in making better decision for the country. As ASEAN countries have responsibility for ASEAN Economic Community (AEC) Blueprint 2025 to meet its objectives, ASEAN governments are expected to effectively monitor the public spending as fiscal instrument in stimulating economic growth. Government expenditure may become unproductive if misallocating and using it in excess. From this study, there is evidence that government expenditure has impact on economic growth. Future research is expected to expand the investigation to other composition of government spending such as education, defense and infrastructure expenditures instead of using general government final consumption expenditures.
This study basically examines the relationship between government external debt, corruption, and ECNG in selected five ASEAN countries, by estimating the magnitude and direction of the regression relationship, as well as the causal relationship. In addition, as a contribution in the direction of government and economic policymakers, this study intends to proffer recommendations as to the efficient management of public resources, in order to cushion the adverse effects of external indebtedness on other macroeconomic variables and welfare standards. Such effects include high cost of servicing, corruption, and capital flight, considering that investors fear being highly taxed when debts get to a certain level by the government. The findings of the study have revealed the fact that the the negative results on the economy, there is need for addressing the threat of increasing debt by the government through using alternative sources of capital investment. This can include economy openness for capital and relaxing the import restrictions and increased valuable exports. Investment can be increased in the domestic economy and wealth can be created through realizing the in-tax revenue from capital imported, which is against the interest payment on external debt. Moreover, the investment can increase ECNG, which results in transfer of technology to the domestic economy increasing the probability of more employment opportunities.