Public Debt and Government Expenditure: Applied Study on the Palestinian Environment

Abstract

This study aims to identify the effect of public debt on Palestinian government expenditure from the year 1997-2019. An analytical descriptive approach was used. The study found that the public debt positively impacts government expenditures and current expenditure, this confirms that the largest proportion of public debt is spent on the non-productive consumer aspects without direct concern for the elements of real economic production. In addition, the public debt negatively affects the development expenditures, which are usually supported by foreign aid and grants. Based on previous results, the researcher progress with several recommendations, the most important of which are that the Palestinian Authority should rationalize public and private consumption spending, and encourage citizens to invest by making them aware of the benefits of directing savings towards investment, financing projects. That is to achieve Palestinian priorities and economic development at the national level and within the main directions of the Palestinian Development Plan while increasing the share of development expenditures