Public Spending and Inclusive Growth in Developing Asia

Benedict Clements (), Sanjeev Gupta () and Joao Jalles
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Benedict Clements: Universidad de Las Americas
Sanjeev Gupta: Center for Global Development

No 653, Working Papers from Center for Global Development

Abstract: This paper discusses the determinants of inclusive growth in developing Asia, with a focus on government expenditures. We find that higher levels of fiscal redistribution (through income taxes and direct transfers) increase the probability of achieving inclusive growth, as well as the level of government spending on health and education. To spur inclusive growth in the aftermath of the COVID pandemic, countries with limited fiscal space will need to focus on improving efficiency and reallocate existing outlays to activities that benefit low-income groups. Reallocating health spending toward primary care, and education spending toward primary and secondary education, would help lead to more equitable growth. There is also scope to better target social benefits to the poor.

Keywords: income inequality; economic growth; inclusive growth; binary choice models; health expenditure; education; social protection (search for similar items in EconPapers)
JEL-codes: H11 H5 I14 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2023-08-30
New Economics Papers: this item is included in nep-pbe and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:653

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