Moreno-Dodson, Blanca2012-06-012012-06-012008-07https://hdl.handle.net/10986/6850The goal of this paper is to understand better, at the empirical level, how public spending contributes to growth by focusing on both the level and composition of public spending, in connection to the dynamics of GDP per capita growth. It attempts to answer two specific questions: (a) What are the policy conditions under which public spending contributes positively to growth? and (b) What are the public spending components that have a stronger and longer-lasting impact on growth? The analysis is applied to a sample of seven fast-growing developing countries: Korea, Singapore, Malaysia, Thailand, Indonesia, Botswana, and Mauritius, which have been among the top performers in the world in terms of GDP per capita growth during the period (1960-2006). The rationale for this country sample selection is twofold. The first hypothesis is that, given their positive growth achievements over a relatively long time period, perhaps it is more straightforward to establish a link to public spending in those countries. Second, it is expected that the findings of the analysis will provide lessons regarding the level and composition of public spending that can be useful for other countries where growth has been less rapid. Assessing what role public spending has played in a dynamic growth context may indeed be enlightening for other cases as well. The paper is structured as follows. The first section is an introduction that provides relevant facts and information about the seven countries during the period of analysis, based on seven individual country case studies. Section II presents the theoretical background behind the empirical analysis. Section III focuses on the empirical methodology, function specification, and variables selected. Section IV is dedicated to the results obtained with the cross-country analysis and some specific country results, as well as some comparisons with previous findings by other authors. Finally, Section V draws policy implications and concludes.CC BY 3.0 IGOACCOUNTINGACCOUNTING FRAMEWORKALLOCATIONBUDGET ALLOCATIONSBUDGET IMPLEMENTATIONBUDGET PLANBUDGET SURPLUSBUREAUCRATIC QUALITYBUSINESS CYCLESCAPITAL ACCUMULATIONCAPITAL EXPENDITURECAPITAL STOCKCATEGORIES OF EXPENDITURESCENTRAL GOVERNMENTCIVIL SERVICECLASSIFICATION OF EXPENDITURESCOMPARISON GROUPCOMPOSITION OF PUBLIC SPENDINGCONSUMER PRICE INDEXCONTINGENT LIABILITIESCONTRIBUTIONCONTRIBUTIONSCOUNTRY CASECOUNTRY LEVELCREATIVE ACCOUNTINGCREDIBILITYCROSS-COUNTRY ANALYSISDATA AVAILABILITYDATA COLLECTIONDEBT SUSTAINABILITYDECENTRALIZATIONDECENTRALIZATION OF GOVERNMENT ACTIVITIESDELIVERY OF HEALTH SERVICESDEPENDANTDEPENDENT VARIABLEDEVELOPING COUNTRIESDEVELOPMENT INDICATORSDEVELOPMENT STRATEGIESDUMMY VARIABLEDUMMY VARIABLESDYNAMIC PANELECONOMIC AFFAIRSECONOMIC GROWTHECONOMIC MANAGEMENTEDUCATION EXPENDITURESELECTRICITYEMPIRICAL LITERATUREEMPIRICAL REGULARITIESEMPIRICAL RESULTSEMPIRICAL STUDIESESTIMATED COEFFICIENTSESTIMATION METHODESTIMATION RESULTSEXPENDITURE CLASSIFICATIONEXPENDITURE DECISIONSEXPENDITURE FUNCTIONSEXPENDITURE TRACKING SURVEYSEXPLANATORY VARIABLESEXTERNAL DEBTEXTERNALITIESFINANCESFINANCIAL CRISESFISCAL ADJUSTMENTFISCAL ADJUSTMENTSFISCAL BALANCEFISCAL CONTROLFISCAL DEFICITFISCAL DEFICITSFISCAL DISCIPLINEFISCAL EXPENDITURESFISCAL POLICYFISCAL REVENUEFISCAL RULESFISCAL STABILITYFISCAL SURPLUSFISCAL TARGETSGENERAL PUBLICGINI COEFFICIENTGOLDEN RULEGOVERNMENT BUDGETGOVERNMENT BUDGET CONSTRAINTGOVERNMENT BUDGETSGOVERNMENT EXPENDITUREGOVERNMENT EXPENDITURESGOVERNMENT SAVINGSGOVERNMENT SPENDINGGROWTH CONTEXTGROWTH EFFECTGROWTH EQUATIONGROWTH IMPACTGROWTH LITERATUREGROWTH PROCESSGROWTH RATEGROWTH RATESGROWTH REGRESSIONGROWTH REGRESSIONSHEALTH CAREHEALTH EXPENDITUREHEALTH EXPENDITURESHEALTH OUTCOMESHOUSINGHUMAN CAPITALHUMAN DEVELOPMENTINCOMEINCOME DISPARITIESINCOME DISTRIBUTIONINCOME POVERTYINDEPENDENT VARIABLESINDEX GROWTHINDUSTRIAL POLICYINFLATIONINFLATION RATEINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINTEREST RATESINTERNATIONAL BANKINVESTMENT FLOWSINVESTMENT RATIOLABOR FORCELAGGED DEPENDENTLAGGED GROWTHLAGGED VALUELAGGED VALUESLEVELS OF PUBLIC SPENDINGLIFE EXPECTANCYLIVING STANDARDSLONG RUNLONG-RUN GROWTHLOW INCOMEMACROECONOMIC INSTABILITYMACROECONOMIC STABILITYMAINTENANCE OF ROADSNEGATIVE EFFECTNEGATIVE IMPACTNEGATIVE SIGNNET BORROWINGNET CAPITALNET DEBTNET LENDING0 HYPOTHESISPANEL REGRESSIONSPER CAPITA GROWTHPHYSICAL ASSETSPOLICY FORMULATIONPOLICY IMPLICATIONSPOLICY ISSUESPOLICY MAKERSPOLICY PERSPECTIVEPOLICY RESEARCHPOLITICAL CONSIDERATIONSPOLITICAL RISKPOSITIVE COEFFICIENTPOVERTY REDUCTIONPRICE INDEXPRIVATE CAPITALPRIVATE INVESTMENTPRIVATE INVESTMENTSPRIVATE SECTORPRIVATE SECTOR INVESTMENTPRODUCTIVITYPROPERTY RIGHTSPUBLICPUBLIC CAPITALPUBLIC DEBTPUBLIC EXPENDITUREPUBLIC EXPENDITURE TRACKINGPUBLIC EXPENDITURESPUBLIC FINANCEPUBLIC FUNDSPUBLIC INVESTMENTPUBLIC INVESTMENTSPUBLIC SECTORPUBLIC SERVICESPUBLIC SPENDINGQUALITY OF EDUCATIONQUALITY OF PUBLIC SPENDINGRATE OF GROWTHRATES OF RETURNRATIO OF PUBLIC SPENDINGRESEARCH ASSISTANCERETURNROAD NETWORKRURAL AREASSALARIESSANITATIONSAVINGSSIGNIFICANT EFFECTSIGNIFICANT IMPACTSOCIAL EXPENDITURESOCIAL EXPENDITURESSOCIAL INFRASTRUCTURESOCIAL SECURITYSOCIAL SPENDINGSTANDARD DEVIATIONSTATE UNIVERSITYSTOCKSTAXTAX BURDENTAX REVENUETAX REVENUESTAX SYSTEMTAXATIONTECHNOLOGICAL PROGRESSTOTAL PUBLIC SPENDINGTOTAL SPENDINGTRADINGTRANSPARENCYTYPES OF EXPENDITURESUNCERTAINTYWorld Bank10.1596/1813-9450-4663