Publication:
Public Expenditure and Growth

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dc.contributor.authorHerrera, Santiago
dc.date.accessioned2012-06-06T22:08:24Z
dc.date.available2012-06-06T22:08:24Z
dc.date.issued2007-10
dc.description.abstractGiven that public spending will have a positive impact on GDP if the benefits exceed the marginal cost of public funds, the present paper deals with measuring costs and benefits of public spending. The paper discusses one cost seldom considered in the literature and in policy debates, namely, the volatility derived from additional public spending. The paper identifies a relationship between public spending volatility and consumption volatility, which implies a direct welfare loss to society. This loss is substantial in developing countries, estimated at 8 percent of consumption. If welfare losses due to volatility are this sizeable, then measuring the benefits of public spending is critical. Gauging benefits based on macro aggregate data requires three caveats: a) considering of the impact of the funding (taxation) required for the additional public spending; b) differentiating between investment and capital formation; c) allowing for heterogeneous response of output to different types of capital and differences in network development. It is essential to go beyond country-specificity to project-level evaluation of the benefits and costs of public projects. From the micro viewpoint, the rate of return of a project must exceed the marginal cost of public funds, determined by tax levels and structure. Credible evaluations require microeconomic evidence and careful specification of counterfactuals. On this, the impact evaluation literature and methods play a critical role. From individual project evaluation, the analyst must contemplate the general equilibrium impacts. In general, the paper advocates for project evaluation as a central piece of any development platform. By increasing the efficiency of public spending, the government can permanently increase the rate of productivity growth and, hence, affect the growth rate of GDP.en
dc.identifierhttp://documents.worldbank.org/curated/en/2007/10/8466839/public-expenditure-growth
dc.identifier.doi10.1596/1813-9450-4372
dc.identifier.urihttps://hdl.handle.net/10986/7366
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 4372
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABSENTEEISM
dc.subjectACCOUNTING
dc.subjectADMINISTRATIVE COSTS
dc.subjectADVERSE EFFECT
dc.subjectAGGREGATE COST
dc.subjectAGRICULTURAL OUTPUT
dc.subjectALLOCATION
dc.subjectAMOUNT OF RISK
dc.subjectAVERAGE GROWTH
dc.subjectBANKS
dc.subjectBENCHMARK
dc.subjectBENCHMARKING
dc.subjectBENCHMARKS
dc.subjectBENEFICIARIES
dc.subjectBENEFICIARY
dc.subjectBENEFITS OF PUBLIC SPENDING
dc.subjectBUDGET CONSTRAINT
dc.subjectBUSINESS CYCLE
dc.subjectCALCULATION
dc.subjectCALCULATIONS
dc.subjectCAPITAL ACCOUNT
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITAL EXPENDITURES
dc.subjectCAPITAL FORMATION
dc.subjectCAPITAL SPENDING
dc.subjectCAPITAL STOCK
dc.subjectCAPITAL STOCKS
dc.subjectCASH TRANSFER
dc.subjectCD
dc.subjectCENTRAL BANKS
dc.subjectCENTRAL BUDGET
dc.subjectCENTRAL BUDGET OFFICE
dc.subjectCENTRAL GOVERNMENT
dc.subjectCOMPLIANCE COSTS
dc.subjectCOMPOSITION OF PUBLIC SPENDING
dc.subjectCONSUMERS
dc.subjectCONSUMPTION EXPENDITURE
dc.subjectCONSUMPTION TAXES
dc.subjectCONTINGENT LIABILITIES
dc.subjectCONTRACTUAL ARRANGEMENTS
dc.subjectCOST INCREASES
dc.subjectCOST-BENEFIT ANALYSIS
dc.subjectCURRENT PRICES
dc.subjectCUT SPENDING
dc.subjectDATA AVAILABILITY
dc.subjectDEGREE OF RISK
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDISCOUNT RATE
dc.subjectDISCOUNT RATES
dc.subjectEARNINGS
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC ANALYSIS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC EFFICIENCY
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC RATE OF RETURN
dc.subjectECONOMIC UNCERTAINTY
dc.subjectEDUCATION SPENDING
dc.subjectEDUCATIONAL ATTAINMENT
dc.subjectEDUCATIONAL PROGRAM
dc.subjectEFFECTIVENESS OF PUBLIC SPENDING
dc.subjectEFFICIENCY OF PUBLIC SPENDING
dc.subjectEFFICIENCY OF RESOURCE USE
dc.subjectELASTICITY
dc.subjectELECTRICITY
dc.subjectEQUILIBRIUM
dc.subjectEXCHANGE RATE
dc.subjectEXPENDITURE GROWTH
dc.subjectEXPENDITURE PROGRAMS
dc.subjectEXPORT PERFORMANCE
dc.subjectFINANCES
dc.subjectFINANCIAL MARKETS
dc.subjectFISCAL MANAGEMENT
dc.subjectFISCAL POLICY
dc.subjectFISCAL POSITIONS
dc.subjectFLOATING EXCHANGE RATE
dc.subjectGDP
dc.subjectGDP PER CAPITA
dc.subjectGOVERNMENT CONSUMPTION
dc.subjectGOVERNMENT CONSUMPTION EXPENDITURE
dc.subjectGOVERNMENT EXPENDITURE
dc.subjectGOVERNMENT SPENDING
dc.subjectGROWTH RATE
dc.subjectHEALTH OUTCOMES
dc.subjectHEALTH PROGRAMS
dc.subjectHIGHER EXPENDITURE
dc.subjectHOUSEHOLD FINANCES
dc.subjectHOUSING
dc.subjectHOUSING PRICES
dc.subjectHUMAN CAPITAL
dc.subjectINCOME
dc.subjectINCOME DISTRIBUTION
dc.subjectINCOME EFFECT
dc.subjectINCOME GROUP
dc.subjectINCOME GROUPS
dc.subjectINCOME LEVEL
dc.subjectINCOME TAXES
dc.subjectINCOMES
dc.subjectINCREASE IN INCOME
dc.subjectINDEBTED COUNTRIES
dc.subjectINDEXATION
dc.subjectINEFFICIENCY
dc.subjectINFRASTRUCTURE DEVELOPMENT
dc.subjectINFRASTRUCTURE PROJECTS
dc.subjectINSTITUTIONAL CAPACITY
dc.subjectINSTRUMENT
dc.subjectINTERNATIONAL BANK
dc.subjectINVENTORY
dc.subjectINVESTMENT PROJECTS
dc.subjectINVESTMENT SPENDING
dc.subjectLABOR FORCE
dc.subjectLABOR MARKET
dc.subjectLITERACY
dc.subjectLOAN
dc.subjectLOCAL GOVERNMENTS
dc.subjectLOCAL NEWSPAPERS
dc.subjectLOW INCOME
dc.subjectLOWER INCOME
dc.subjectMACROECONOMIC ENVIRONMENT
dc.subjectMACROECONOMICS
dc.subjectMARGINAL COST
dc.subjectMARGINAL PRODUCT
dc.subjectMARGINAL TAX RATE
dc.subjectMARKET FAILURES
dc.subjectMARKET FORCES
dc.subjectMATH
dc.subjectMIDDLE INCOME COUNTRIES
dc.subjectMONETARY POLICY
dc.subjectMONETARY UNION
dc.subjectMONETARY UNIONS
dc.subjectNATIONAL BUDGET
dc.subjectPARTIAL EQUILIBRIUM ANALYSIS
dc.subjectPENSION
dc.subjectPENSION BENEFITS
dc.subjectPERMANENT INCOME
dc.subjectPERMANENT INCOME HYPOTHESIS
dc.subjectPOLITICAL ECONOMY
dc.subjectPORTFOLIO
dc.subjectPOVERTY RATES
dc.subjectPRESENT VALUE
dc.subjectPRICE CHANGES
dc.subjectPRIMARY EDUCATION
dc.subjectPRIVATE CAPITAL
dc.subjectPRIVATE CONSUMPTION
dc.subjectPRIVATE INVESTMENT
dc.subjectPRIVATE SECTOR
dc.subjectPRIVATE SECTOR PARTICIPATION
dc.subjectPROBABILITY
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTION INPUTS
dc.subjectPRODUCTIVE ASSETS
dc.subjectPRODUCTIVITIES
dc.subjectPRODUCTIVITY
dc.subjectPRODUCTIVITY GROWTH
dc.subjectPRODUCTIVITY INCREASES
dc.subjectPROGRAM EVALUATIONS
dc.subjectPROVISION OF GOODS
dc.subjectPUBLIC
dc.subjectPUBLIC BUDGETING
dc.subjectPUBLIC BUDGETS
dc.subjectPUBLIC CAPITAL
dc.subjectPUBLIC CONSUMPTION
dc.subjectPUBLIC DEBT
dc.subjectPUBLIC DEBT MANAGEMENT
dc.subjectPUBLIC EXPENDITURE
dc.subjectPUBLIC EXPENDITURE MANAGEMENT
dc.subjectPUBLIC FINANCES
dc.subjectPUBLIC FUNDS
dc.subjectPUBLIC INVESTMENT
dc.subjectPUBLIC INVESTMENT IN INFRASTRUCTURE
dc.subjectPUBLIC REVENUE
dc.subjectPUBLIC SCHOOLS
dc.subjectPUBLIC SECTOR
dc.subjectPUBLIC SECTORS
dc.subjectPUBLIC SERVICE
dc.subjectPUBLIC SPENDING
dc.subjectPUBLIC TRANSPORT
dc.subjectRATE OF RETURN
dc.subjectRATES OF RETURN
dc.subjectRECURRENT COST
dc.subjectRECURRENT COSTS
dc.subjectRECURRENT EXPENDITURES
dc.subjectRENTS
dc.subjectRETURNS
dc.subjectRISK AVERSE
dc.subjectRISK AVERSION
dc.subjectRISK TOLERANCE
dc.subjectROADS
dc.subjectRULE OF LAW
dc.subjectSALES
dc.subjectSAVINGS
dc.subjectSECONDARY SCHOOL
dc.subjectSECONDARY SCHOOLS
dc.subjectSIDE EFFECTS
dc.subjectSOCIAL BENEFIT
dc.subjectSTAKEHOLDER
dc.subjectSTAKEHOLDERS
dc.subjectSTOCKS
dc.subjectSTREETS
dc.subjectSUBSTITUTION EFFECT
dc.subjectTAX
dc.subjectTAX COLLECTIONS
dc.subjectTAX RATE
dc.subjectTAX REVENUE
dc.subjectTAX SYSTEM
dc.subjectTAXATION
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectTOTAL WELFARE COST
dc.subjectTRADE POLICY
dc.subjectTRADING
dc.subjectTRADING SYSTEM
dc.subjectTRANSITION ECONOMIES
dc.subjectTREASURY
dc.subjectUSER CHARGES
dc.subjectUTILITIES
dc.subjectVOUCHER PROGRAM
dc.subjectVOUCHER PROGRAMS
dc.subjectWAGE
dc.subjectWAGE EXPENDITURES
dc.subjectWEALTH
dc.subjectWELFARE LOSS
dc.subjectWORTH
dc.titlePublic Expenditure and Growthen
dspace.entity.typePublication
okr.crossref.titlePublic Expenditure And Growth
okr.date.doiregistration2025-04-10T10:42:44.688272Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2007/10/8466839/public-expenditure-growth
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.guid659061468340136583
okr.identifier.doi10.1596/1813-9450-4372
okr.identifier.externaldocumentum000158349_20071010103853
okr.identifier.internaldocumentum8466839
okr.identifier.reportWPS4372
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/10/10/000158349_20071010103853/Rendered/PDF/wps4372.pdfen
okr.topicEconomic Theory and Research
okr.topicPublic Sector Expenditure Analysis and Management
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicPublic Sector Economics and Finance
okr.topicMacroeconomics and Economic Growth
okr.topicPublic Sector Development
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublicationb8257292-3111-5480-90dd-5aeb70e52589
relation.isAuthorOfPublication.latestForDiscoveryb8257292-3111-5480-90dd-5aeb70e52589
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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