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Government spending: Is development assistance harmonised with other budgets?

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  • Abbott, Andrew
  • Jones, Philip

Abstract

This paper explores the way governments rely on budgets. Budgets are classified with reference to functions (e.g. defence, education, etc.), but expenditure from one budget (e.g. the overseas budget) can prove as effective as expenditure from another budget (e.g. the environment budget) when pursuing a specific policy goal. Are donor countries internalising spillovers by harmonising overseas aid spending with other budgetary expenditures? An empirical analysis of OECD countries (between 1990 and 2005) suggests that they rely systematically on a preferred portfolio of budgets.

Suggested Citation

  • Abbott, Andrew & Jones, Philip, 2012. "Government spending: Is development assistance harmonised with other budgets?," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 921-931.
  • Handle: RePEc:eee:jpolmo:v:34:y:2012:i:6:p:921-931
    DOI: 10.1016/j.jpolmod.2012.05.017
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    References listed on IDEAS

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    1. P. B. Anand, 2004. "Financing the Provision of Global Public Goods," The World Economy, Wiley Blackwell, vol. 27(2), pages 215-237, February.
    2. Todd Sandler & Daniel G. Arce, 2007. "New face of development assistance: public goods and changing ethics," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(4), pages 527-544.
    3. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
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    5. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    6. Mosley, Paul, 1985. "The Political Economy of Foreign Aid: A Model of the Market for a Public Good," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 373-393, January.
    7. Clist, Paul, 2011. "25Years of Aid Allocation Practice: Whither Selectivity?," World Development, Elsevier, vol. 39(10), pages 1724-1734.
    8. Jones, Philip R, 1996. "Rents from In-Kind Subsidy: "Charity" in the Public Sector," Public Choice, Springer, vol. 86(3-4), pages 359-378, March.
    9. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    10. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, May.
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    More about this item

    Keywords

    Budget; Defence; Education; Health; Environment;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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