| dc.description.abstract | The study sought to establish the effect of budget deficit on economic development in
East African Countries. The factors identified in the study are budget deficit rate,
interest rate, inflation rate and foreign exchange. The theories that were guiding this
study are Keynesian, Linear Stages of Growth, International Dependence theory and
Neoclassical Counter- Revolution theory. The reason behind conducting this study
was the growth of economy at a decreasing rate. The study used quantitative data in
form of secondary data from Tanzania, Kenya, Uganda, Rwanda and Burundi for a
ten year period from 2004 to 2013. All the data was expressed in terms of percentages
and correlation design was considered appropriate as it enables the establishment of
the relationship among the variables. The effect of budget deficit on economic
development has been conducted in many countries in the world but few in East
Africa. The multi variety linear regression was conducted for the countries and the
findings was positive relationship in all countries. From the findings, the researcher
concluded that the effect of budget deficit on economic development depends on how
the funds financing the deficit used, if it was used for development purposes then it
would have a positive one but if it is for meeting the recurrent expenditures then there
would be a negative relationship between the two. The study recommends that Tanzania,
Kenya, Uganda, Burundi and Rwanda should broaden and manage efficiently the tax base in
order to finance their expenditure adequately and help increase the multiplier that further
generate output hence economic growth. The study also recommends that East African
countries should create more revenue sources to increase the income to reduce dependence on
developed countries and also to create conducive environment for more opportunities. | en_US |
