Effects of Public Expenditures on Agriculture at Subnational Levels on Households’ Welfare and Economic Resilience in Nigeria

The findings suggest that greater PEA shares have positive effects on various development outcomes at the household level, including consumption, poverty reduction, nonfarm capital investments, and household dietary diversity. The findings also suggest that greater PEA shares are likely to help farm households enhance their economic flexibility. These findings are consistent with the hypotheses of positive linkages between PEA and agricultural outcomes, and linkages between agricultural and nonagricultural outcomes, often advocated in the literature. PEA should be increased by increasing its share of total public expenditures through conscious efforts to reallocate existing resources, rather than trying to increase it by increasing the overall size of public expenditures. Furthermore, it remains important to identify the appropriate sources (for example, spending by LGA or state) and types of PEA (for example, recurrent or capital spending) for particular development outcomes.