Optimal Size of Public Expenditure and Agricultural Growth in Togo: Evidence from Armey Curve

ABSTRACT

This paper examines, using the Armey curve approach, the possibility of the existence of an optimal size of agricultural public expenditure in Togo. Using annual data from 1987 to 2019, the results show that the actual size of public agricultural expenditure is much below the optimal size, which is 34% of agricultural GDP for total agricultural expenditure and 27% for agricultural investment. In the light of these results, it appears that the Togolese government can pursue the expansionary fiscal policy by increasing agricultural expenditure to the optimal level. The gap is very deep and requires a significant qualitative jump.