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Social Spending, Human Capital, and Growth in Developing Countries: Implications for Achieving the MDGs
Author:
Mr. Emanuele Baldacci
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,
Mr. Larry Q Cui
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,
Mr. Benedict J. Clements
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, and
Mr. Sanjeev Gupta
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Series:
IMF Working Papers
Volume/Issue:
Volume 2004: Issue 217
Language:
English
Publication Date:
01 Nov 2004
DOI:
https://doi.org/10.5089/9781451875140.001
ISBN:
9781451875140
ISSN:
1018-5941
Pages:
39
Keywords:
WP; mortality rate; public spending
Legal-disclaimer:
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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Using panel data from 120 developing countries from 1975 to 2000, this paper explores the direct and indirect channels linking social spending, human capital, and growth in a system of equations. The paper finds that both education and health spending have a positive and significant direct impact on the accumulation of education and health capital, and thus can lead to higher economic growth. The paper also finds that other policy interventions, such as improving governance, reducing excessive budget deficits, and taming inflation, can also be helpful in moving countries toward the Millennium Development Goals (MDGs). As such, higher spending alone is not sufficient to achieve the MDGs.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund