Government Expenditure and Economic Growth: An Empirical Investigation

International Monetary Fund

No 1989/045, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the empirical evidence on the contribution that government and, in particular, capital expenditure make to the growth performance of a sample of developing countries. Using the Denison growth accounting approach, this study finds that social expenditures may have a significant impact on growth in the short run, but infrastructure expenditures may have little influence. While current expenditures for directly productive purposes may exert a positive influence, capital expenditure in these sectors appears to exert a negative influence. Experiments with other explanatory variables confirm the importance of the growth of exports to the overall growth rate.

Keywords: WP; economic growth; government expenditure; capital expenditure; public spending; government consumption expenditure; capital infrastructure expenditure; expenditure priority; aggregate government expenditure; share of government consumption expenditure; expenditure category; maintenance expenditure; Capital spending; Current spending; Total expenditures; Human capital (search for similar items in EconPapers)
Pages: 30
Date: 1989-01-01
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1989/045

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