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Public spending and outcomes : does governance matter?

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Author Info
Rajkumar, Andrew Sunil
Swaroop, Vinaya
Abstract

The authors examine the role of governance-measured by level of corruption and quality of bureaucracy-and ask how it affects the relationship between public spending and outcomes. Their main innovation is to see if differences in efficacy of public spending can be explained by quality of governance. The authors find that public health spending lowers child and infantmortality rates in countries with good governance. The results also indicate that as countries improve their governance, public spending on primary education becomes effective in increasing primary education attainment. These findings have important implications for enhancing the development effectiveness of public spending. The lessons are particularly relevant for developing countries, where public spending on education and health is relatively low, and the state of governance is often poor.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2840.

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Date of creation: 31 May 2002
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Handle: RePEc:wbk:wbrwps:2840

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Related research
Keywords: Health Systems Development&Reform; Public Health Promotion; Public Sector Economics&Finance; Decentralization; Health Monitoring&Evaluation; Health Economics&Finance; National Governance; Governance Indicators; Health Monitoring&Evaluation; Public Sector Economics&Finance;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
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  2. Pritchett, Lant, 1996. "Mind your P's and Q's : the cost of public investment is not the value of public capital," Policy Research Working Paper Series 1660, The World Bank. [Downloadable!]
  3. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank. [Downloadable!]
  4. Craig Burnside & David Dollar, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September. [Downloadable!] (restricted)
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  5. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank. [Downloadable!]
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  6. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April. [Downloadable!] (restricted)
  7. Hanushek, Eric A, 1995. "Interpreting Recent Research on Schooling in Developing Countries," World Bank Research Observer, Oxford University Press, vol. 10(2), pages 227-46, August.
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  8. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September. [Downloadable!] (restricted)
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  10. Sanjeev Gupta & Erwin Tiongson & Marijn Verhoeven, 1999. "Does Higher Government Spending Buy Better Results in Education and Health Care?," IMF Working Papers 99/21, International Monetary Fund.
  11. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May. [Downloadable!] (restricted)
  12. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ivaschenko, Oleksiy, 2004. "Longevity in Russia's Regions: Do Poverty and Low Public Health Spending Kill?," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. Omar Azfar & Tugrul Gurgur, 2008. "Does corruption affect health outcomes in the Philippines?," Economics of Governance, Springer, vol. 9(3), pages 197-244, July. [Downloadable!] (restricted)
  3. Naoko C. Kojo & Emanuele Baldacci & Arye L. Hillman, 2003. "Growth, Governance, and Fiscal Policy Transmission Channels in Low-Income Countries," IMF Working Papers 03/237, International Monetary Fund. [Downloadable!]
    Other versions:
  4. Luca, SPINESI, 2005. "Rent-Seeking Bureaucracies in a Schumpeterian Endogenous Growth Model : Effects on Human Capital Accumulation, Inequality and Growth," Discussion Papers (ECON - Département des Sciences Economiques) 2005027, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
  5. Deolalikar, Anil B. & Jamison, Dean T. & Laxminarayan, Ramanan, 2007. "India's Health Initiative: Financing Issues and Options," Discussion Papers dp-07-48, Resources For the Future. [Downloadable!]
  6. Feeny, Simon & Rogers, Mark, 2007. "Public Sector Efficiency and Small Island Developing States," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  7. Warlters, Michael & Auriol, Emmanuelle, 2005. "The marginal cost of public funds in Africa," Policy Research Working Paper Series 3679, The World Bank. [Downloadable!]
  8. Sonia Bhalotra, 2007. "Spending to Save? State Health Expenditure and Infant Mortality in India," The Centre for Market and Public Organisation 07/169, Department of Economics, University of Bristol, UK. [Downloadable!]
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  9. Mária Lackó, 2006. "Tax Rates with Corruption: Labour-market Effects. Empirical Cross-country Comparisons on OECD Countries," IEHAS Discussion Papers 0604, Institute of Economics, Hungarian Academy of Sciences, revised 15 May 2006. [Downloadable!]
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