Public Spending and Deficits: Evidence from a Developing Economy

Ashfaque H Khan

Public Finance = Finances publiques, 1988, vol. 43, issue 3, 396-402

Abstract: J. Buchanan and R. Wagner (1977) put forward a theoretical proposition that an increase in public spending is the result of the tolerance of large federal deficits. The empirical findings of this paper support their proposition for a developing country like Pakistan. This paper also finds that the growth of income is a powerful factor in the progressive increase in public spending. The evidence presented further suggests that productivity of the public sector in Pakistan is lower compared with the manufacturing sector. Such a productivity lag in the public sector may adversely affect the growth performance of the economy.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:pfi:pubfin:v:43:y:1988:i:3:p:396-402

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