Gemmell, NormanMisch, FlorianMoreno-Dodson, Blanca2014-02-182014-02-182012-12https://hdl.handle.net/10986/17061By financing public goods and services that enhance productivity and promote private investment, public spending is widely believed to be critical for long-run growth. Such effects are distinct from any short-run Keynesian response to a public spending stimulus. While a short-run response generally operates through aggregate demand, long-run growth effects alter aggregate supply conditions. While academic literature generally supports the belief that public spending promotes growth in the long run, understanding which public expenditure allocations can trigger such effects in a particular country setting is challenging in practice. The objective of this note1 is to review the trade-offs faced by fiscal policy makers in developing countries who are considering using public expenditure policy as an instrument to promote long run growth, provide guidance from the empirical literature, and review the types of data sources that are helpful in this context.en-USCC BY 3.0 IGOACCOUNTABILITYAGGREGATE DEMANDBUDGET CONSTRAINTBUDGET CONSTRAINTSCAPITAL ACCUMULATIONCAPITAL SPENDINGCENTRAL GOVERNMENTCOMPOSITION OF PUBLIC SPENDINGCONSUMPTION TAXESCOUNTRY DATACURRENT EXPENDITURESDEVELOPING COUNTRIESDEVELOPING COUNTRYECONOMETRIC ISSUESECONOMIC ACTIVITYECONOMIC DOWNTURNSECONOMIC GROWTHECONOMIC LITERATUREECONOMIC PERFORMANCEECONOMIC POLICYECONOMIC REFORMELECTRICITYEMPIRICAL EVIDENCEEMPIRICAL GROWTH LITERATUREEMPIRICAL LITERATUREEMPIRICAL STUDIESEXPENDITURE ALLOCATIONSEXPENDITURE CATEGORIESEXPENDITURE GROWTHEXPENDITURE POLICYEXPENDITURE TRACKINGEXPENDITURE TRACKING SURVEYSEXPLANATORY VARIABLESFISCAL CHANGESFISCAL DEFICITSFISCAL POLICYFISCAL SPACEGOVERNMENT BUDGETGOVERNMENT BUDGET CONSTRAINTGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROWTH EFFECTGROWTH LITERATUREGROWTH RATEGROWTH RATESHEALTH PROGRAMSINCOME TAXESLEVEL OF PUBLIC SPENDINGLEVELS OF PUBLIC SPENDINGLONG RUNLONG-RUN GROWTHMACROECONOMIC STABILITYMARGINAL PRODUCTPERSONAL INCOMEPERSONAL INCOME TAXESPOLICY ANALYSISPOLICY MAKERSPOLICY PERSPECTIVEPOOR GOVERNANCEPOVERTY REDUCTIONPRIVATE INVESTMENTPRIVATE SECTORPUBLICPUBLIC ADMINISTRATIONPUBLIC CAPITALPUBLIC DEBTPUBLIC DEBT LEVELSPUBLIC ECONOMICSPUBLIC EXPENDITUREPUBLIC EXPENDITURE POLICYPUBLIC EXPENDITURE TRACKINGPUBLIC EXPENDITURESPUBLIC FINANCEPUBLIC GOODSPUBLIC HEALTHPUBLIC INFRASTRUCTUREPUBLIC INVESTMENTPUBLIC RESOURCESPUBLIC REVENUEPUBLIC SERVICESPUBLIC SPENDINGPUBLIC SPENDING ALLOCATIONSROAD CONSTRUCTIONROADSSUBNATIONALTAXTAX REVENUETAXATION10.1596/17061