Abstract

The relationship between government revenue and government expenditure has been an important topic in public economics, given its relevance for policy especially with respect to the budget deficit. The purpose of this research is to investigate the relationship between revenue and expenditure in Bauchi state by using multiple linear regression for the period of 2010-2020. Secondary data sought from Bauchi state internal revenue service (BIRS). Findings from the study indicate that increase in government expenditure without corresponding revenue will widen the budget deficit. It recommended from the findings that; the Bauchi state government should increase it size of its internal generated revenue in order to accommodate it capital expenditure of the state. Expenditure reforms analysis should be considered vis-à-vis taxes and all other revenues sources. This will help set targets for revenue mobilization and utilization as well as expenditure spreading over the entire state economy. The Bauchi state government in order be sustainable in its development strive must develop the internal generated revenue base, promote fiscal prudence in the management of its resource. The government should continue to increase its aggregate revenue mostly from internally generated revenue base, since only revenue from internal sources can boost the state income given dwindling allocation from the federation account. The government should go a step further in intensifying efforts at developing other sources of revenue in order to insulate the economy of the state.

Key words: Key words: Revenue, Expenditure, Regression analysis.