Public Expenditures and the Performance of Latin American and Caribbean Agriculture

Gustavo Anríquez, William Foster, Jorge Ortega, César Falconi and Carmine Paolo De Salvo

No 7839, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: Economic theory and econometric evidence support the thesis that the displacement of government expenditures on public goods by subsidies to private goods inhibits the performance of the farm sector. This paper presents an analysis of the influence of the mix of expenditures related to agriculture on net income generation, using data for 19 Latin American and Caribbean countries during 1985-2012. The econometric results demonstrate that total government spending on the farm sector positively impacts agriculture's performance. More importantly, and of greater practical economic significance, increasing the share of expenditures committed to public goods, ceteris paribus, would significantly raise rural income as measured by sector value added per capita of the rural population.

Keywords: gasto público; government spending; gasto agrícola; government agricultural policy; agricultural spending (search for similar items in EconPapers)
JEL-codes: H50 O13 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2016-09
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:7839

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