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The Distributional Effects of Public Expenditure

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  • Schwartz, Gerd
  • Ter-Minassian, Teresa

Abstract

It is commonly agreed that economic policies, including budgetary policies, can have potentially strong distributional effects. Traditional economic analysis held that economic policies affected the income distribution primarily through their impact on the rate of growth. More recently, it has come to be recognised that qualitative aspects of economic growth are probably more important than the rate of growth itself. While recent research has confirmed the potential role of expenditure policies as a redistributive tool, it has also shown that redistribution does not necessarily have to come at the expense of economic growth and efficiency. Although there are substantial analytical and technical problems to be faced in the design of equitable and cost-effective public expenditure programmes, unfavourable distributional outcomes of these programmes can usually be traced more to political and institutional pressures than to purely technical factors. Copyright 2000 by Blackwell Publishers Ltd

Suggested Citation

  • Schwartz, Gerd & Ter-Minassian, Teresa, 2000. " The Distributional Effects of Public Expenditure," Journal of Economic Surveys, Wiley Blackwell, vol. 14(3), pages 337-358, July.
  • Handle: RePEc:bla:jecsur:v:14:y:2000:i:3:p:337-58
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    References listed on IDEAS

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    1. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    2. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    3. Alesina, Alberto & Perotti, Roberto, 1994. "The Political Economy of Growth: A Critical Survey of the Recent Literature," World Bank Economic Review, World Bank Group, vol. 8(3), pages 351-371, September.
    4. Tomson Ogwang, 1995. "The Economic Development-Income Inequality Nexus," American Journal of Economics and Sociology, Wiley Blackwell, vol. 54(2), pages 217-229, April.
    5. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
    6. Bourguignon, F. & Michel, G. & Miqueu, D., 1983. "Short-run rigidities and long-run adjustments in a computable general equilibrium model of income distribution and development," Journal of Development Economics, Elsevier, vol. 13(1-2), pages 21-43.
    7. Robert Haveman, 1994. "Should Generational Accounts Replace Public Budgets and Deficits?," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 95-111, Winter.
    8. Park, Walter G & Brat, David A, 1995. "A Global Kuznets Curve?," Kyklos, Wiley Blackwell, vol. 48(1), pages 105-131.
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    Cited by:

    1. Jorge Martínez-Vázquez & Violeta Vulovic & Blanca Moreno Dodson, 2012. "The Impact of Tax and Expenditure Policies on Income Distribution: Evidence from a Large Panel of Countries," Hacienda Pública Española, IEF, vol. 200(1), pages 95-130, March.
    2. Gradstein, Mark, 2003. "The political economy of public spending on education, inequality, and growth," Policy Research Working Paper Series 3162, The World Bank.
    3. Cont, Walter & Porto, Alberto, 2014. "Personal and regional redistribution through public finance in a federal setting," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(4), pages 563-578.
    4. Adnan Efendic & Naida Trkic-Izmirlija, 2013. "Effects of the global economic crisis and public spending on income distribution in Bosnia and Herzegovina," wiiw Balkan Observatory Working Papers 108, The Vienna Institute for International Economic Studies, wiiw.
    5. Gabriella Legrenzi & Costas Milas, 2002. "The Role of Omitted Variables in Identifying a Long-run Equilibrium Relationship for the Italian Government Growth," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(4), pages 435-449, August.

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