Public Spending and Inclusive Growth in Developing Asiaâ€

Benedict Clements, Sanjeev Gupta and Joao Jalles

Public Finance Review, 2025, vol. 53, issue 2, 139-168

Abstract: This paper examines the impact of government spending on inclusive growth in developing Asia, focusing on fiscal redistribution through education, health, and social benefits. Using panel data from 16 countries over the period 1970–2017, we apply a fixed-effects logistic regression model to assess the likelihood of inclusive growth episodes. Our findings indicate that fiscal redistribution, particularly through targeted health and education spending, significantly enhances the chances of achieving inclusive growth. The results also suggest that redistributive spending helps reduce income inequality, ensuring that the benefits of economic growth are more widely shared. We further explore the practical implications of these findings through case studies of China, India, and Vietnam, demonstrating how effective government spending can foster inclusive growth. The paper highlights the importance of well-targeted fiscal policies to support sustainable and equitable development in the post-COVID recovery.

Keywords: income inequality; economic growth; inclusive growth; binary choice models; health expenditure; education; social protection (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:53:y:2025:i:2:p:139-168

DOI: 10.1177/10911421241296203

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