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Fiscal policies in highly unequal societies: implications for agricultural growth

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Author Info

  • Ramón López

    ()
    (University of Maryland at College Park)

Abstract

The paper discusses the economic effects of misallocation of public expenditures in favor of private goods rather than public goods. It first lays out certain key hypotheses regarding the consequences of the apparent public sector allocation inefficiency and the factors that explain this phenomenon. It then discusses existing empirical evidence that lends at least indirect support to these hypotheses. Finally, it presents new empirical evidence for the rural sector in Latin America which documents the extent of the misallocation of public expenditures, its consequences for agricultural growth and rural poverty, and the role of certain key politico-institutional factors in explaining the misallocation.

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File URL: ftp://ftp.fao.org/docrep/fao/010/ai194e/ai194e00.pdf
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Bibliographic Info

Article provided by Food and Agriculture Organization of the United Nations in its journal The Electronic Journal of Agricultural and Development Economics.

Volume (Year): 4 (2007)
Issue (Month): 1 ()
Pages: 123-145

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Handle: RePEc:fao:tejade:v:4:y:2007:i:1:p:123-145

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Related research

Keywords: public expenditure; public goods; agricultural growth; subsidies; social equity.;

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References

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  1. Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
  2. Allcott, Hunt & Lederman, Daniel & Lopez, Ramon, 2006. "Political institutions, inequality, and agricultural growth : the public expenditure connection," Policy Research Working Paper Series 3902, The World Bank.
  3. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
  4. Bergström, Fredrik, 1998. "Capital Subsidies and the Performance of Firms," Working Paper Series in Economics and Finance 285, Stockholm School of Economics.
  5. Chu, K.-y. & Davoodi, H. & Gupta, S., 2000. "Income Distribution and Tax, and Government Social Spending Policies in Developing Countries," Research Paper 214, World Institute for Development Economics Research.
  6. Lee, Jong-Wha, 1996. " Government Interventions and Productivity Growth," Journal of Economic Growth, Springer, vol. 1(3), pages 391-414, September.
  7. Barbara Fakin, 1995. "Investment Subsidies during Transition," Eastern European Economics, M.E. Sharpe, Inc., vol. 33(5), pages 62-74, October.
  8. Ke-young Chu & Hamid Reza Davoodi & Sanjeev Gupta, 2000. "Income Distribution and Tax and Government Social Spending Policies in Developing Countries," IMF Working Papers 00/62, International Monetary Fund.
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Cited by:
  1. Haggblade, Steven, 2007. "Returns to Investment in Agriculture," Food Security Collaborative Policy Briefs 54625, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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