Fiscal Policy and Growth in Developing Asia

Arnelyn May Abdon (), Gemma Estrada (), Minsoo Lee and Donghyun Park

No 412, ADB Economics Working Paper Series from Asian Development Bank

Abstract: In this paper we empirically explore the relationship between fiscal policy and economic growth in developing Asia. The region’s overall level of taxes and government spending are substantially lower than those prevailing in advanced economies. Nevertheless, there are conceptual grounds why fiscal policy, including the composition of taxes and government spending, can have a significant effect on growth, as our empirical analysis shows. In line with economic theory, property taxes have a more benign impact on growth than direct taxes, and spending more on education has a sizable positive impact on growth.

Keywords: fiscal policy; growth; taxation; government spending; Asia (search for similar items in EconPapers)
JEL-codes: H20 H50 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014-10-01
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-pbe and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0412

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