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Fiscal Policy And Economic Development

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  • Mourmouras, Alexandros
  • Rangazas, Peter

Abstract

This paper offers possible explanations for three generally observed facts about fiscal policy and development: (F1) The relative size of government increases as an economy develops, (F2) The rise in government and taxation are associated with rising or constant economic growth rates, and (F3) Today’s developing countries have larger government sectors than did today’s developed countries at similar stages of development. The explanations for these facts are based on the structural transformation from traditional to modern production, rising public infrastructure investment, and less democratic governments in many of today’s developing economies.

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Bibliographic Info

Article provided by Cambridge University Press in its journal Macroeconomic Dynamics.

Volume (Year): 13 (2009)
Issue (Month): 04 (September)
Pages: 450-476

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Handle: RePEc:cup:macdyn:v:13:y:2009:i:04:p:450-476_08

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Cited by:
  1. Susana Martins & Francisco José Veiga, 2013. "Government size, composition of public expenditure, and economic development," NIPE Working Papers 17/2013, NIPE - Universidade do Minho.

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