International Evidence of Strengthening Taxes and Spending For Sustainable Development

Joshua Aizenman, Yothin Jinjarak, Hien Nguyen and Donghyun Park

No 29594, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We trace the linkages between the episodes of fiscal expansion and consolidation in 72 advanced and emerging and developing economies. The findings suggest that fiscal expansions are positively associated with economic growth, which in turn is positively linked with better sustainable development outcomes. The association between fiscal consolidation and growth as well as the sustainable development indicators, however, is not clear-cut. Jointly, more tax revenues and expenditures, together with better governance help explain the association between economic growth and inclusive development. High-income, high-tax-revenue, and manufacture-exporting economies have made significant progress on reducing disease-linked mortality and improving environment protection along with economic growth. Meanwhile, emerging and developing, low-tax-revenue, and commodity-exporting economies have gained notable improvement in poverty reduction, pre-primary enrolment and access to basic sanitation services and clean cooking fuels and technologies, and lowering bribery incidence. On average, the sampled economies have persistently achieved better primary goals such as sanitation, clean fuels and technologies. Achievements in mortality reduction, and environmental protection goals are shown more recently.

JEL-codes: E62 F15 F34 O11 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-env and nep-mac
Note: DEV IFM PE
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