THE IMPACT OF FISCAL POLICY ON ECONOMIC GROWTH CASE OF THE TANZANIAN ECONOMY 2000-2020

Abstract

The study assessed the impact of fiscal policy dynamics on economic growth concerning the Tanzanian economy 2000-2020. The study was guided by three predicting variables tested on economic growth as the dependent variable. The predicting variables include recurrent expenditure, development expenditure, and income tax. The explanatory design was used to depict the knowledge gap for the inquiry employing causal relationship testing between study variables. Secondary data were used whereas specifically using panel data in time series for the period of 21 years (2000-2020). The data were gathered from secondary sources, which were filled in an Excel sheet and imported into the E-view 10 software for generating statistical measurements to present the results. Findings indicated that among three predicting variables, two namely recurrent expenditure and development expenditure, have been found significant on economic growth (p<0.05). However, income tax was found significant towards economic growth with (p>0.1) 10% level of significance. This implies that economic growth through fiscal policy dynamics is influenced by recurrent expenditure and development expenditure, and income tax.