The Role of Fiscal Policy on Economic Growth A Study of Ghana: An Empirical Literature

Benjamin Blandful Cobbinah 1*, Chidiebube Emmanuel Obodo 1 , Francis Atta Sarpong 1 Larsey
Naphtali Akwetteh 1 1 School of Economics and Management, Anhui University of Science and Technology,
Huainan, PR China

Abstract
The effectiveness of fiscal policy on emerging country economic growth is a hot topic of discussion. While
adjusting the levels of public spending and determining tax rates, policymakers in developing countries strive to
address socioeconomic concerns such as poverty, unemployment, hunger, bad investment, and illiteracy. The
impact of fiscal policy on Ghana’s economic growth is examined in this study. The study looked into and
reviewed a variety of journals in order to provide this report on the roles, effects, and impacts of fiscal policy
on Ghana’s economic growth. The discrepancies in conclusions of the effect of fiscal policy measures on
economic growth can be seen in the research mentioned above. Some studies have found that it has a favorable
effect, while others have found that it has a detrimental effect. A few researchers have found that it has no effect.
They also illustrate that there are disparities in public spending and tax revenues between countries, with one
having a good influence and the other having a negative impact, and one or both having an impact and being
effective. In terms of monetary and fiscal policies, fiscal policy boosted economic growth in certain countries
while having the reverse effect in others. When government expenditure was channeled to productive and
investment sectors with sustainable productivity, fiscal policy achieved its targeted economic growth objectives.
According to the findings, despite its important role in welfare advancements, government consumption
spending has been detrimental to economic growth; policymakers must analyze its composition in order for it to
improve growth. Government consumption expenditures should be reduced through targeted measures.
Expenditures that are likely to stifle private investment should be scrutinized as well.
Key words: Fiscal Policy, Tax, Government Spending, Economic Growth, World Bank