Government spending and regional poverty alleviation: evidence from Egypt

Poverty is a major socio-economic problem facing most developing countries. In Egypt, approximately 30% of citizens live below the poverty level, which is more evident at the regional level. Reducing poverty can be achieved through better allocation of government spending, because it is essential for promoting economic growth, improving income distribution and reducing poverty. Understanding the relationships between government spending and regional poverty reduction can enhance the ability of policymakers to design programs that effectively reduce regional poverty and lessen income inequality. This study aimed to analyze the impact of government spending in alleviating regional poverty in Egypt. A panel data set for 27 Egyptian governorates from 2010 to 2018 was employed. The two-way fixed effect regression model was used to apply the differences between regions over time. The results showed that only social government spending significantly affects poverty reduction at the national level. Health, education and social government spending showed significant negative impacts on poverty at the region level, especially in Upper Egypt and Cairo.