Growth and Government: Is there a Difference between Developed and Developing Countries?
AbstractWe examine the role of government for growth in 64 industrialized and developing countries, considering both expenditure and financing aspects of government. Recognizing that there are differences between the two country groups leading to severe heteroskedasticity, we use weighted least squared estimations. The general conclusion is that the means of financing matters more for growth than do government spending. We find that seigniorage and budget surplus are important for growth in LDCs but not in industrialized countries, while capital revenue matters only in the latter group. Moreover, the level of indebtedness is a negative determinant of growth in LDCs.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 275.
Length: 35 pages
Date of creation: 23 Oct 1998
Date of revision:
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Growth; government; public expenditure; public financing.;
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-10-26 (All new papers)
- NEP-ENV-1998-10-26 (Environmental Economics)
- NEP-TID-1998-10-26 (Technology & Industrial Dynamics)
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