Objective - This study examines the causal relationship between government expenditure and economic growth in West Kalimantan between 2009 and 2015. This research resulted in the enactment of Wagner's Law and/or Keynes's Theory in West Kalimantan leading the local government to take the right policies as an effort towards improving economic development.

Methodology/Technique - By using panel data that combines time series data and cross-site data, it will be estimated by the Granger causality test which begins with a stationary test and co-integration test. Based on the co-integration tests, the results suggest that there is a long-term relationship between government expenditure and economic growth. Meanwhile, based on the Granger causality test, there is no reciprocal relationship between government expenditure and economic growth.

Findings - A direct relationship in the form of the influence of government expenditure on economic growth in West Kalimantan.

Novelty - These results are in line with the Keynes's Theory through its national income function.

Type of Paper: Empirical

Keywords: Government Expenditure; Economic Growth; Co-integration; Causality.

JEL Classification: F40, F43, F49.