Which Factors Are Associated with Government Final Consumption Expenditure in Mauritania? An ARDL Analysis (1986–2020)

Abstract

This article analyzes the macroeconomic, financial, and demographic factors associated with government final consumption expenditure in Mauritania (1986–2020). Using World Development Indicators data, the study applies an Autoregressive Distributed Lag (ARDL) bounds testing procedure (Pesaran et al., 2001) and an error correction model. Explanatory variables include real GDP per capita, natural resource rents, urbanization, external debt service, trade openness, and foreign direct investment. The bounds test confirms the existence of a long-run relationship among the variables. Estimates indicate that trade openness has a statistically significant positive long-run association with public consumption. Conversely, natural resource rents and urbanization display statistically significant negative associations, while external debt service is negative at the 10% level. No significant long-run relationships are found for real GDP per capita or foreign direct investment. The error correction coefficient indicates that about 66.98% of deviation from long-run equilibrium is corrected annually. Diagnostic tests do not indicate serial correlation, heteroskedasticity, non-normality, or misspecification, while CUSUM/CUSUMSQ tests confirm parameter stability. Overall, these findings highlight how external exposure, demographic concentration, and fiscal constraints shape public consumption dynamics in Mauritania.