Abstract

this study aims to explore the effect of public and private investment expenditure on economic growth in Jordan in the period (1990-2012).
The result of the study showed that the public capital expenditure has obviously evolved during the period of the study where the mean of annual rate of growth of this expenditure was 6.4%, while the ratio of this expenditure to the total public expenditure (current capital) by mean was 20.5%,which is low ratio in a country that need a high economic of growth which is required to increase the size of public investment expenditure and economizing the current expenditure.
The study findings revealed an obvious evolution the size of private investment expditure during the period of the study, where the mean of the annual rate of growth of this expenditure is 15% while the ratio of this expenditure to the GDP (by mean )is 18.8% where as this ratio for the public capital expenditure was 7.5% during the period of the study, and that ratio reflected the contribution of public and private sector in the economic activity in Jordan
The statistical result indicated that , the public investment expenditure Variable was the most influential on the Economic growth in Jordan during the period of the study, then comes ( in terms of influence ) the private investment expenditure , while the influence of the capital formation variable was week , and it was insignificant to any level of acceptable confidence this justified by the weakness of the disposabile saving which is the main supplier of the capital formation in Jordan .
The statistical result indicated that the marginal propensity to invest of public investment expenditure was very high compared to the marginal poropensity to invest of the private investment expenetiture and this might be an indicator for the importance of the public investment and their changes as a result change in GDP.
The study recommended of the necessity of depending on the public investment expenditure to increasing rate of economic growth in Jordan , and avoiding the neglicant of the role of the private investment expenditure because each one of them complete the other and doesn’t replace it .