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Does Allocation of Public Spending Matter in Poverty Reduction? Evidence from Thailand

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  • Shenggen Fan
  • Bingxin Yu
  • Somchai Jitsuchon

Abstract

The present paper uses a panel dataset to estimate the marginal returns to different types of government expenditure on agricultural growth and rural poverty reduction in Thailand. The study finds that additional government spending on agricultural research provides the largest return in terms of agricultural productivity and has the second largest impact on rural poverty reduction. Increased investment in rural electrification has the largest poverty reduction impact, mainly through improved nonfarm employment. Rural education has the third largest impact on both productivity and poverty reduction. Irrigation has a positive impact on agricultural productivity, but regional variation is considerable. Government spending on rural roads has no significant impact on agricultural productivity and its poverty reduction impact ranks last among all investment alternatives considered. Additional investment in the Northeast Region has a greater impact on poverty reduction than in other regions. Copyright 2008 The Authors. Journal compilation 2008 East Asian Economic Association and Blackwell Publishing Ltd.

Suggested Citation

  • Shenggen Fan & Bingxin Yu & Somchai Jitsuchon, 2008. "Does Allocation of Public Spending Matter in Poverty Reduction? Evidence from Thailand ," Asian Economic Journal, East Asian Economic Association, vol. 22(4), pages 411-430, December.
  • Handle: RePEc:bla:asiaec:v:22:y:2008:i:4:p:411-430
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    Cited by:

    1. Ulrike Nischan & Adam Kennedy & Than Tun, 2016. "Promoting Agricultural Growth in Myanmar: A Review of Policies and an Assessment of Knowledge Gaps," Working Papers id:8792, eSocialSciences.
    2. Renkow, Mitch, 2010. "Impacts of IFPRI's "priorities for pro-poor public investment" global research program:," Impact assessments 31, International Food Policy Research Institute (IFPRI).
    3. Mogues, Tewodaj & Yu, Bingxin & Fan, Shenggen & Mcbride, Linden, 2012. "The impacts of public investment in and for agriculture: Synthesis of the existing evidence," IFPRI discussion papers 1217, International Food Policy Research Institute (IFPRI).
    4. Bingxin Yu & Shenggen Fan, 2011. "Rice production response in Cambodia," Agricultural Economics, International Association of Agricultural Economists, vol. 42(3), pages 437-450, May.
    5. Dissou, Yazid & Didic, Selma & Yakautsava, Tatsiana, 2016. "Government spending on education, human capital accumulation, and growth," Economic Modelling, Elsevier, vol. 58(C), pages 9-21.
    6. Nyarkoh, James Bright, 2016. "Modelling Government Expenditure-Poverty Nexus for Ghana," MPRA Paper 75727, University Library of Munich, Germany.
    7. Tun, Than & Kennedy, Adam & Nischan, Ulrike, 2015. "Promoting Agricultural Growth in Myanmar: A Review of Policies and an Assessment of Knowledge Gaps," Food Security International Development Papers 230983, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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