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How Effective is Public Spending? Public Investment Composition and Rural Welfare in Ethiopia

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  • Mogues, Tewodaj
  • Ayele, Gezahegn
  • Paulos, Zelekawork
  • Fan, Shenggen

Abstract

One of the most important policy tools in developing countries for affecting economic growth and poverty reduction is expenditure policy. As governments decide how to allocate public spending, they need a clear understanding of how public investments translate into development outcomes. Using regional, zonal, and household-level data from Ethiopia, this paper analyses the relative returns, in terms of rural welfare, to different forms of public investment, including investment in agriculture, health, education, road infrastructure, and health.

Suggested Citation

  • Mogues, Tewodaj & Ayele, Gezahegn & Paulos, Zelekawork & Fan, Shenggen, 2006. "How Effective is Public Spending? Public Investment Composition and Rural Welfare in Ethiopia," 2006 Annual meeting, July 23-26, Long Beach, CA 21258, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea06:21258
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    References listed on IDEAS

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    1. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, vol. 86(2), pages 277-295, June.
    2. Stefano Paternostro & Anand Rajaram & Erwin R. Tiongson, 2007. "How Does the Composition of Public Spending Matter?," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 47-82.
    3. Aschauer, David Alan, 2000. "Public Capital and Economic Growth: Issues of Quantity, Finance, and Efficiency," Economic Development and Cultural Change, University of Chicago Press, vol. 48(2), pages 391-406, January.
    4. Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
    5. John J Matovu & Era Dabla-Norris, 2002. "Composition of Government Expenditures and Demand for Education in Developing Countries," IMF Working Papers 02/78, International Monetary Fund.
    6. Shenggen Fan & Xiaobo Zhang, 2008. "Public Expenditure, Growth and Poverty Reduction in Rural Uganda," African Development Review, African Development Bank, vol. 20(3), pages 466-496.
    7. Gregory Amacher & Jeffrey Alwang, 2004. "Productivity and Land Enhancing Technologies in Northern Ethiopia: Health, Public Investments, and Sequential Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 321-331.
    8. Jung, Hong-Sang & Thorbecke, Erik, 2003. "The impact of public education expenditure on human capital, growth, and poverty in Tanzania and Zambia: a general equilibrium approach," Journal of Policy Modeling, Elsevier, vol. 25(8), pages 701-725, November.
    9. Karuna Gomanee & Sourafel Girma & Oliver Morrissey, 2005. "Aid, public spending and human welfare: evidence from quantile regressions," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(3), pages 299-309.
    10. Paul Collier & Stefan Dercon & John Mackinnon, 2002. "Density versus Quality in Health Care Provision: Using Household Data to Make Budgetary Choices in Ethiopia," World Bank Economic Review, World Bank Group, vol. 16(3), pages 425-448, December.
    11. Wolde-Ghiorgis, W., 2002. "Renewable energy for rural development in Ethiopia: the case for new energy policies and institutional reform," Energy Policy, Elsevier, vol. 30(11-12), pages 1095-1105, September.
    12. Ajwad, Mohamed Ihsan & Wodon, Quentin, 2007. "Do local Governments maximize access rates to public services across areas?: A test based on marginal benefit incidence analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(2), pages 242-260, May.
    13. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
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    Keywords

    Public Economics;

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