REGIONAL GROWTH IMPACT OF LIBYAN DEVELOPMENT BUDGET EXPENDITURES

The purpose of this study is to develop a model that would be of some use in regional planning in Libya. More specifically, in this study, a regional growth model that takes account of government regional development expenditures is developed. The model was first constructed for the time span 1964-1970 which is regarded as the pre-government budget and then for the time span (1971-1980) which encompasses those years in which the government\u27s budget was explicitly used as a development vehicle. A comparison was also made between the pre-regional objectives time span (1971-1975) and the regional objectives time span (1976-1980). Using economic base theory, a reduced form regression model is presented which includes a measure of the amount and type of government spending in each region as explanatory variables. Calculated beta coefficients are used to measure the relative magnitude of development program impacts. Williamson index is also used to test certain hypotheses about regional income differentials. The results of the study indicate that the amount and type of government development budget are statistically significant factors in explaining changes in regional income. The size of these effects, however, appear to be high for some variables and low for other development variables relative to other growth influencing factors. The results also indicate that the shift in regional budget (1976-1980) has improved the economic structure of these regions. The Williamson index shows that regional per capita income differentials tended to decrease rather than increase during the regional development budget time span (1971-1980). The results of the study also show that most regions have achieved a remarkable improvement in their social infrastructure. However, the results of this model are largely indicative rather than definitive and should be interpreted as one step in the right direction for further research