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Government Expenditure and Economic Growth: An Empirical Investigation
Author:
International Monetary Fund
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Series:
IMF Working Papers
Volume/Issue:
Volume 1989: Issue 045
Language:
English
Publication Date:
01 Jan 1989
DOI:
https://doi.org/10.5089/9781451974157.001
ISBN:
9781451974157
ISSN:
1018-5941
Pages:
30
Keywords:
WP; economic growth; government expenditure; capital expenditure; public spending; government consumption expenditure; capital infrastructure expenditure; expenditure priority; aggregate government expenditure; share of government consumption expenditure; expenditure category; maintenance expenditure; Capital spending; Current spending; Total expenditures; Human capital
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the empirical evidence on the contribution that government and, in particular, capital expenditure make to the growth performance of a sample of developing countries. Using the Denison growth accounting approach, this study finds that social expenditures may have a significant impact on growth in the short run, but infrastructure expenditures may have little influence. While current expenditures for directly productive purposes may exert a positive influence, capital expenditure in these sectors appears to exert a negative influence. Experiments with other explanatory variables confirm the importance of the growth of exports to the overall growth rate.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund