Governance and Rural Public Expenditures in Latin America. The Impact on Rural Development
In this paper we examine the effects of the composition (between private and public goods) of government expenditures in the rural world, and the effect that corruption has in the political game that determines these allocation decisions. In the first section of this paper we develop a political economy model where corruption and trade openness counteract to determine, within a political equilibrium, the amount of public funds to be devoted to the rural world, and their composition between public and private goods. In the second section we contrast the implications of the political economy model with recently released data on rural public expenditures in Latin America. We find that corruption reduces the amount of public funds that reach the rural world, but not its composition. We also find that after accounting for the endogeneity of public expenditure decisions, the composition of these expenditures significantly determines rural development (as proxied by agricultural GDP).
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy|
Phone: +39(6) 57051
Fax: +39 06 57055522
Web page: http://www.fao.org/es/esa/
More information through EDIRC
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.:
- Fan, Shenggen & Chan-Kang, Connie & Mukherjee, Anit, 2005. "Rural and urban dynamics and poverty: Evidence from China and India," FCND discussion papers 196, International Food Policy Research Institute (IFPRI).
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003.
"Instrumental variables and GMM: Estimation and testing,"
StataCorp LP, vol. 3(1), pages 1-31, March.
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," North American Stata Users' Group Meetings 2003 05, Stata Users Group.
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," United Kingdom Stata Users' Group Meetings 2003 02, Stata Users Group.
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003.
When requesting a correction, please mention this item's handle: RePEc:fao:wpaper:0701. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gustavo Anríquez)
If references are entirely missing, you can add them using this form.