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Does Composition of Government Spending Matter to Economic Growth?

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  • Yu, Bingxin
  • Fan, Shenggen
  • Saurkar, Anuja

Abstract

This paper assesses the impact of the composition of government spending on economic growth in developing countries. We use a dynamic GMM model and a panel data set for 44 developing countries between 1980 and 2004. We find that the various types of government spending have different impact on economic growth. In Africa, human capital spending contributes to economic growth whereas in Asia, capital formation, agriculture and education has strong growth promoting effect. In Latin America, none of government spending items has significant impact on economic growth. Our results are robust regardless of model specifications and instruments chosen.

Suggested Citation

  • Yu, Bingxin & Fan, Shenggen & Saurkar, Anuja, 2009. "Does Composition of Government Spending Matter to Economic Growth?," 2009 Conference, August 16-22, 2009, Beijing, China 51684, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51684
    DOI: 10.22004/ag.econ.51684
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    Cited by:

    1. Dincă Marius Sorin & Dincă Gheorghița, 2013. "The Impact of Government Expenditures upon Economic Growth in Post-Communist Countries," Scientific Annals of Economics and Business, Sciendo, vol. 60(1), pages 126-134, July.
    2. Morten Endrikat, 2017. "Natural resource rents, autocracy and the composition of government spending," MAGKS Papers on Economics 201727, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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