RELATED LITERATURE:

According to (Shaaba & Nicholas, 2018), military expenditure is an

important sector in many African countries’ government expenditure

budgets. It has an impact on both industrialisation and economic growth

in the regional economic communities of member-states through peace

and security. Therefore, a need for continuous implementation of

appropriate reforms and policies in order to ensure that resources

allocated to the defense sector is inclined to its functions.

The aforementioned literatures are significant to the current research

in connection with the military expenditure. It stated that military

expenditure has a significant role in the country’s budget since it

is necessary for maintaning peace and security that affect economic

growth and industrialisation which the present study intend to analyse

in the ASEAN countries.

According to (Tullao Jr., 2003) Globalization process has to consider

on improving the quality of higher education domestically, by which

education is defined as an investment in human capital that contributed

in explaining increases in labor productivity as well as national

income of many nation. He also states that, opening the education

sector of countries in the ASEAN region may also contribute to the

growing external pressures for the Philippines to evaluate the reasons

why these countries considered the liberation of their educational

services. Hence, foreign participation and investment in school system

bring in some opportunities that may enhance and expand higher

education of a country.
The reviewed literature has a huge bearing to the present study because

it provides idea about the importance of expanding the quality of

education that will help the country to compete globally and in order

to uplift the economy. Thus, the government should invest heavily in

education and they should be open to new opportunities like foreign

participation in school system of a country in order to improve

productivity and to enhance their growth potential.

(Dizaji, Farzanegan, & Naghavi, 2014) mentioned how quality of

political institution affects the distribution of government budget

in Iran which results to positive effect to democratic institution

that indicate a significant negative response of military expenditure

and significant positive response of education expenditures and a

higher provision of goods and services which needs a larger portion

of population demand and a small military group. However, these

findings are robust to different

specification of government spending and alternative political

institution indicators.

The above cited literature are of great relevance to the present study

because it shows that the political institution specifically

democratic institution has a positive impact on government

expenditure. Thus, emphasizing the need of population and reducing

military group. But these claimed however is dependent to the specified

government expenditure and the political institution indicators which

is another area of concern by the current study.

The government expenditures are generally made for the public goods.

The major government expenditures are national defense, social

insurance and services, and education and other expenses (Henderson &
Poole, 1991). In addition, the author also said that the growth of the

urban population increases the demand for public service relative to

a rural setting. These in effect requires more regulation, planning

and spending for public safety and health and much greater expenditures

per capita on other expenses.

The above mentioned literature has a bearing to the present study in

line with the population, because it gives idea to the researchers

that whatever may be the components of government expenditure these

must always result to the benefit of the public. Thus, the larger the

population of a country the more expenditure and requirement are needed

to effictively provide services to the people that in turn may affect

economic growth which the current study want to determine in the ASEAN

countries.

According to (Shaaba & Nicholas, 2018), military expenditure is an important sector in many African
countries’ government expenditure budgets, therefore, a need for continuous implementation of
appropriate reforms and policies in order to ensure that resources allocated to the defense sector is
inclined to its functions. They further stated that military expenditure has an impact on both
industrialisation and economic growth in the regional economic communities of member-states
through peace and security.

RELATED STUDY:

(Hao, Fun, Chung, & Loong, 2013) studied the government

expenditure components that affect economic growth in Malaysia

and found that there is a significant and positive relationship

between the government expenditure and economic growth as a

whole. On the other hand, the impact of the independent variables

which consists of education, military, transportation, and

general administration is identified and show that only

transportation and education sector are significant towards the

economic growth.

(Awuh, 2018) examined how public expenditure affects economic

growth. As a result, this shows that a relationship exists

between government expenditure and economic growth. While some

component shows negative results between public expenditure and

economic growth, others exerted positive effect. As expected,

public expenditure on education, transport, and communication,

agriculture, capital expenditure seems to be significant. While,

in advanced countries expenditure on health, total expenditure

and current expenditure are negative and significant, but health

is not significant. On the other hand, expenditure on

agriculture, capital expenditure transport and communication

appear to be positively related to economic growth.

The aforecited studies bears similarity with the present study for they both concerned to

the relationship of government expenditure and economic growth

and how they specify government expenditure that may affect

economic growth into education, military, agriculture etc. Hence, they did proved that

there is a relationship between government expenditure and economic growth in general

considering some other factors. On the other hand, the above studies

included developing and advanced countries while the present

study used ASEAN countries as a population not only one country and

disregarding whether they are developing or advanced countries.

The previous studies also fails to consider the effect of the socio demographic profile of the

samples and population they used to the government expenditure and thus economic growth.

(Carter, Craigwell, & Lowe, 2013) suggested that the total

government expenditure produces a drag on economic growth,

particularly in the short-run. More specifically the results

indicate that while outlays on health and social security have

little influences on per capita economic growth; government

expenditure on education typically has a significant and

negative impact on growth, both in the long and short runs. In

addition, reallocations of government expenditure from one

component to another may have growth-enhancing effects without

having to change the level of government expenditure.

In the study of (Hasnul, 2015), highlighted that a larger

government expenditure may lead to a lower economic growth. As

they classify the government expenditure into some categories,

only two categories of government expenditure, namely

development expenditure and housing expenditure, significantly

lead to a lower economic growth. Moreover, they found that

education, defense, healthcare, and development expenditure do

not significantly contribute to the economic growth. Given the

negative relationship between the government expenditure and

economic growth, it may be a signal of which government

expenditure is not a cause of economic growth, as what have been

suggested by Wagner’s law.

The studies cited above is the same with the recent study since they both

addresses the relationship of the components of government

expenditure and economic growth. They found that government expenditures

lower economic growth. However, the present study does not consider

the effect of particular government expenditure on economic

growth in the long and short run since 10 countries is ought to

be study. In addition, the present study does not signify a category

on government expenditure and consider the socio demographic profile of the ASEAN

countries in analysing the relationship of government expenditure and economic growth.

(Kabuga & Hussaini, 2015) performed a study that provide the

answer on whether there is a correlation between government

expenditure on education and economic growth using annual time

series data for the period of 1981 to 2013 and other test and

estimation which conclude that government expenditure on

education has both capital and recurrent that possitively

influence economic growth, although its significant effect is in

only in the long-run.