How Can Public Spending Help You Grow? An Empirical Analysis for Developing Countries

Bayraktar, Nihal; Moreno-Dodson, Blanca

dc.creator	Bayraktar, Nihal
dc.creator	Moreno-Dodson, Blanca
dc.date	2012-03-19T18:40:57Z
dc.date	2012-03-19T18:40:57Z
dc.date	2010-07-01
dc.date.accessioned	2023-02-17T21:04:43Z
dc.date.available	2023-02-17T21:04:43Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100720152334
dc.identifier	http://hdl.handle.net/10986/3851
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244815
dc.description	Although many studies indicate that both the level and composition of public spending are significant for economic growth, the results in the empirical literature are still mixed. This paper studies the importance of country sample selection and expenditure classification in explaining these conflicting results. It investigates a set of fast-growing countries versus a mix of countries with different growth patterns. The regression specifications include different components of public expenditure and total fiscal revenues, always considering the overall government budget constraint. Total public spending is first disaggregated using a definition that classifies public spending as productive versus unproductive components, an a priori criterion that is based on the expected impact of public spending items on the private sector production function. After empirically confirming the validity of this definition in the panel analysis, the authors suggest and test an alternative definition of "core" public spending that may be more appropriate for developing countries. The empirical analysis shows that the link between growth and public spending, especially the productive and "core" components, is strong only for the fast-growing group. In addition, macroeconomic stability, openness, and private sector investment are significant in the fast-growing group, which points to the existence of an economic policy environment more conducive to growth in the first group of countries. The authors conclude that public spending can be a significant determinant of growth for countries that are capable of using funds for productive purposes.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5367
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ALLOCATION
dc.subject	AVERAGE PRODUCTIVITY
dc.subject	BANK POLICY
dc.subject	BOND
dc.subject	BUDGET BALANCE
dc.subject	BUDGET DEFICIT
dc.subject	BUDGET SURPLUS
dc.subject	BUSINESS CYCLE
dc.subject	BUSINESS CYCLES
dc.subject	CAPITAL ACCUMULATION
dc.subject	CAPITAL EXPENDITURE
dc.subject	CAPITAL SPENDING
dc.subject	CENTRAL GOVERNMENT
dc.subject	CENTRAL GOVERNMENT EXPENDITURE
dc.subject	CIVIL SERVICE
dc.subject	COEFFICIENTS
dc.subject	COMPARATIVE ANALYSIS
dc.subject	COMPARATIVE ECONOMIC STUDIES
dc.subject	COMPARISON GROUP
dc.subject	COMPOSITION OF GOVERNMENT SPENDING
dc.subject	COMPOSITION OF PUBLIC SPENDING
dc.subject	CONSUMER PRICE INDEX
dc.subject	CONSUMPTION EXPENDITURE
dc.subject	CORRELATION COEFFICIENT
dc.subject	COUNTRY CHARACTERISTICS
dc.subject	COUNTRY DATA
dc.subject	COUNTRY INITIAL
dc.subject	COUNTRY LEVEL
dc.subject	COUNTRY RISK
dc.subject	COUNTRY SPECIFIC
dc.subject	CREATIVE ACCOUNTING
dc.subject	CREDIBILITY
dc.subject	CROSS-COUNTRY ANALYSIS
dc.subject	CURRENT EXPENDITURES
dc.subject	DATA ANALYSIS
dc.subject	DATA AVAILABILITY
dc.subject	DEBT
dc.subject	DECISION-MAKING
dc.subject	DEFENSE EXPENDITURES
dc.subject	DEVELOPED COUNTRIES
dc.subject	DEVELOPING COUNTRIES
dc.subject	DOMESTIC INVESTMENT
dc.subject	DUMMY VARIABLE
dc.subject	DUMMY VARIABLES
dc.subject	DYNAMIC PANEL
dc.subject	ECONOMETRIC TECHNIQUES
dc.subject	ECONOMIC AFFAIRS
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC POLICY
dc.subject	ECONOMIC POLICY ENVIRONMENT
dc.subject	EMPIRICAL EVIDENCE
dc.subject	EMPIRICAL LITERATURE
dc.subject	EMPIRICAL RESULTS
dc.subject	EMPIRICAL STUDIES
dc.subject	EMPLOYMENT EQUATIONS
dc.subject	EQUIPMENT
dc.subject	ESTIMATED COEFFICIENT
dc.subject	ESTIMATED COEFFICIENTS
dc.subject	ESTIMATION RESULTS
dc.subject	ESTIMATION TECHNIQUES
dc.subject	EXPENDITURE
dc.subject	EXPENDITURE CLASSIFICATION
dc.subject	EXPENDITURE COMPOSITION
dc.subject	EXPENDITURES
dc.subject	EXPENDITURES ON HEALTH
dc.subject	FINANCES
dc.subject	FINANCIAL CRISES
dc.subject	FINANCIAL STATISTICS
dc.subject	FISCAL ADJUSTMENT
dc.subject	FISCAL AFFAIRS
dc.subject	FISCAL BALANCE
dc.subject	FISCAL EXPENDITURES
dc.subject	FISCAL POLICIES
dc.subject	FISCAL POLICY
dc.subject	FISCAL REVENUE
dc.subject	FISCAL RULES
dc.subject	FIXED CAPITAL
dc.subject	GOLDEN RULE
dc.subject	GOVERNMENT BUDGET
dc.subject	GOVERNMENT BUDGET CONSTRAINT
dc.subject	GOVERNMENT CONSUMPTION
dc.subject	GOVERNMENT EXPENDITURE
dc.subject	GOVERNMENT EXPENDITURES
dc.subject	GOVERNMENT FINANCING
dc.subject	GOVERNMENT INVESTMENT
dc.subject	GOVERNMENT INVOLVEMENT
dc.subject	GOVERNMENT REVENUE
dc.subject	GOVERNMENT SPENDING
dc.subject	GROSS DOMESTIC PRODUCT
dc.subject	GROSS FIXED CAPITAL FORMATION
dc.subject	GROWTH CONTEXT
dc.subject	GROWTH IMPACT
dc.subject	GROWTH MODEL
dc.subject	GROWTH PERFORMANCE
dc.subject	GROWTH RATE
dc.subject	GROWTH RATES
dc.subject	HEALTH EXPENDITURE
dc.subject	HEALTH SERVICES
dc.subject	HEALTH SPENDING
dc.subject	HIGH GROWTH
dc.subject	HOUSING
dc.subject	HUMAN CAPITAL
dc.subject	INCREASE GROWTH
dc.subject	INCREASES GROWTH
dc.subject	INDEPENDENT VARIABLES
dc.subject	INDUSTRIAL SECTOR
dc.subject	INEFFICIENT PROVISION
dc.subject	INFLATION
dc.subject	INFLATION RATE
dc.subject	INFRASTRUCTURE INVESTMENTS
dc.subject	INSURANCE
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL TRADE
dc.subject	LABOR FORCE
dc.subject	LAGGED VALUE
dc.subject	LAGGED VALUES
dc.subject	LEVEL OF PUBLIC SPENDING
dc.subject	LIABILITY
dc.subject	LONG RUN
dc.subject	LONG-RUN GROWTH
dc.subject	LOW-INCOME COUNTRIES
dc.subject	LOWER TAXES
dc.subject	MACROECONOMIC POLICIES
dc.subject	MACROECONOMIC STABILITY
dc.subject	MACROECONOMIC VARIABLES
dc.subject	MEAN GROWTH
dc.subject	MILITARY EXPENDITURES
dc.subject	MONETARY FUND
dc.subject	NATURAL RESOURCES
dc.subject	NEGATIVE IMPACT
dc.subject	NEGATIVE INCENTIVES
dc.subject	NEGATIVE SIGN
dc.subject	NET BORROWING
dc.subject	NET DEBT
dc.subject	NET LENDING
dc.subject	PANEL REGRESSIONS
dc.subject	PER CAPITA GROWTH
dc.subject	POLICY ENVIRONMENT
dc.subject	POLICY FORMULATION
dc.subject	POLICY IMPLICATIONS
dc.subject	POLICY MAKERS
dc.subject	POLICY RESEARCH
dc.subject	POLITICAL ECONOMY
dc.subject	POVERTY REDUCTION
dc.subject	PRICE INDEX
dc.subject	PRIVATE CAPITAL
dc.subject	PRIVATE INVESTMENT
dc.subject	PRIVATE INVESTORS
dc.subject	PRIVATE SECTOR
dc.subject	PRIVATE SECTOR INVESTMENT
dc.subject	PUBLIC
dc.subject	PUBLIC ASSETS
dc.subject	PUBLIC CAPITAL
dc.subject	PUBLIC CHOICE
dc.subject	PUBLIC CONSUMPTION
dc.subject	PUBLIC ECONOMICS
dc.subject	PUBLIC EDUCATION
dc.subject	PUBLIC EDUCATION EXPENDITURE
dc.subject	PUBLIC EXPENDITURE
dc.subject	PUBLIC EXPENDITURES
dc.subject	PUBLIC FUNDS
dc.subject	PUBLIC HEALTH
dc.subject	PUBLIC HEALTH EXPENDITURE
dc.subject	PUBLIC INFRASTRUCTURE
dc.subject	PUBLIC INVESTMENT
dc.subject	PUBLIC INVESTMENTS
dc.subject	PUBLIC SECTOR
dc.subject	PUBLIC SECTOR INVESTMENTS
dc.subject	PUBLIC SERVICES
dc.subject	PUBLIC SPENDING
dc.subject	PUBLIC TRANSPORTATION
dc.subject	PUBLIC WORKS
dc.subject	QUALITY OF EDUCATION
dc.subject	REDUCING INFLATION
dc.subject	RICH COUNTRIES
dc.subject	ROADS
dc.subject	RURAL INFRASTRUCTURE
dc.subject	SIGNIFICANT EFFECT
dc.subject	SIGNIFICANT IMPACT
dc.subject	SIZE OF GOVERNMENT
dc.subject	SOCIAL CONTRIBUTIONS
dc.subject	SOCIAL EXPENDITURE
dc.subject	SOCIAL SECURITY
dc.subject	SOCIAL SECURITY CONTRIBUTIONS
dc.subject	SOCIAL SPENDING
dc.subject	SUB-NATIONAL
dc.subject	TAX
dc.subject	TAX RATE
dc.subject	TAX RATES
dc.subject	TAX REVENUE
dc.subject	TAX REVENUES
dc.subject	TAX STRUCTURE
dc.subject	TAXATION
dc.subject	TOTAL EXPENDITURE
dc.subject	TOTAL EXPENDITURES
dc.subject	TOTAL GOVERNMENT EXPENDITURE
dc.subject	TOTAL PUBLIC EXPENDITURE
dc.subject	TOTAL PUBLIC EXPENDITURES
dc.subject	TOTAL PUBLIC SPENDING
dc.subject	TRANSFER PAYMENTS
dc.subject	TRANSITION ECONOMIES
dc.title	How Can Public Spending Help You Grow? An Empirical Analysis for Developing Countries
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region