Public expenditure distribution, voting, and growth
Lorenzo Burlon ()
No 961, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area
In this paper we study why the misallocation of resources across different productive sectors tends to persist over time. To this end we propose a general equilibrium model that delivers two structural relations. On the one hand, the public expenditure distribution influences the future sectoral composition of the economy; on the other, the distribution of vested interests across sectors determines public policy decisions. The model predicts that different initial sectoral compositions entail different future streams of public expenditure and therefore different development paths.
Keywords: public expenditure; sectoral composition; vested interests; economic growth (search for similar items in EconPapers)
JEL-codes: O41 O43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-fdg, nep-pbe and nep-pol
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Journal Article: Public expenditure distribution, voting, and growth (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_961_14
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