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Is social spending pro‐poor in developing countries? The role of governance and political freedom

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  • Mohamed Ben Mimoun
  • Asma Raies

Abstract

This article extends the existing literature on the social spending‐poverty nexus by testing the proposition that the quality of governance and the political freedom status determine social spending effectiveness in developing countries (DCs). Our analysis helps explain the surprising result documented in prior studies, of no clear evidence that higher social spending, especially on education and health, translates to a significant reduction in poverty in DCs. Using unbalanced panel data of a large sample of DCs covering the period 1980–2019, we demonstrated that the impact of public spending on poverty is significantly reduced in countries that have a poor quality of governance and in those with relatively few political freedoms. This result is robust to a change in the poverty indicator and type, and the estimator used in regression models. This finding implies that improving the efficacy of social spending through improving governance and political freedom is as crucial as increasing the scale of this spending in the poverty alleviation strategy of DCs, especially those with limited public resources. Our empirical analysis also revealed other novel results about the socioeconomic factors most likely to explain poverty in DCs. 本文通过检验“治理质量和政治自由状况决定发展中国家(DCs)的社会支出有效性”这一命题,扩展了关于社会支出与贫困关系的现有文献。我们的分析有助于解释以往研究中得出的意料之外的结果,即没有明确证据表明更高的社会支出(特别是在教育和健康方面)能显著减少发展中国家的贫困。通过使用一项包含1980‐2019年大型发展中国家样本的不平衡面板数据,我们证明,在治理质量差的国家和政治自由相对较少的国家,公共支出对贫困的影响显著降低。当贫困指标、贫困类型以及回归模型使用的估计量出现变化时,这一结果是稳健的。这一发现表明,通过改善治理和政治自由来提高社会支出的效能,与增加发展中国家扶贫战略中的这种支出规模同样重要,尤其是在公共资源有限的地区。我们的实证分析还揭示了关于社会经济因素的其他新结果,后者很有可能解释发展中国家的贫困。 Este artículo amplía la literatura existente sobre el nexo gasto social‐pobreza al probar la proposición de que la calidad de la gobernabilidad y el estatus de libertad política determinan la efectividad del gasto social en los países en desarrollo (PD). Nuestro análisis ayuda a explicar el sorprendente resultado documentado en estudios previos, sin evidencia clara de que un mayor gasto social, especialmente en educación y salud, se traduzca en una reducción significativa de la pobreza en los países en desarrollo. Usando datos de panel no balanceados de una gran muestra de países en desarrollo que cubren el período 1980‐2019, demostramos que el impacto del gasto público en la pobreza se reduce significativamente en países que tienen una mala calidad de gobierno y en aquellos con relativamente pocas libertades políticas. Este resultado es robusto a un cambio en el indicador y tipo de pobreza, y el estimador utilizado en los modelos de regresión. Este hallazgo implica que mejorar la eficacia del gasto social a través de la mejora de la gobernabilidad y la libertad política es tan crucial como aumentar la escala de este gasto en la estrategia de alivio de la pobreza de los países en desarrollo, especialmente aquellos con recursos públicos limitados. Nuestro análisis empírico también reveló otros resultados novedosos sobre los factores socioeconómicos que probablemente expliquen la pobreza en los países en desarrollo.

Suggested Citation

  • Mohamed Ben Mimoun & Asma Raies, 2022. "Is social spending pro‐poor in developing countries? The role of governance and political freedom," Poverty & Public Policy, John Wiley & Sons, vol. 14(3), pages 214-241, September.
  • Handle: RePEc:wly:povpop:v:14:y:2022:i:3:p:214-241
    DOI: 10.1002/pop4.347
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