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Public spending and outcomes : does governance matter?

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  • Rajkumar, Andrew Sunil*Swaroop, Vinaya

Abstract

The authors examine the role of governance-measured by level of corruption and quality of bureaucracy-and ask how it affects the relationship between public spending and outcomes. Their main innovation is to see if differences in efficacy of public spending can be explained by quality of governance. The authors find that public health spending lowers child and infant mortality rates in countries with good governance. The results also indicate that as countries improve their governance, public spending on primary education becomes effective in increasing primary education attainment. These findings have important implications for enhancing the development effectiveness of public spending. The lessons are particularly relevant for developing countries, where public spending on education and health is relatively low, and the state of governance is often poor.

Suggested Citation

  • Rajkumar, Andrew Sunil*Swaroop, Vinaya, 2002. "Public spending and outcomes : does governance matter?," Policy Research Working Paper Series 2840, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2840
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Martin Schlossarek & Jaromír Harmáček & Petr Pavlík, 2016. "Ekonomický růst a lidský rozvoj v rozvojových zemích: zázračný, nebo začarovaný kruh?
      [Economic Growth and Human Development in Developing Countries: Virtuous or Vicious Circle?]
      ," Politická ekonomie, University of Economics, Prague, vol. 2016(6), pages 651-673.
    2. World Bank, 2003. "Decentralizing Indonesia : A Regional Public Expenditure Review Overview Report," World Bank Other Operational Studies 14632, The World Bank.
    3. Cheryl Gray & Tracey Lane & Aristomene Varoudakis, 2007. "Fiscal Policy and Economic Growth : Lessons for Eastern Europe and Central Asia," World Bank Publications, The World Bank, number 6883, July.
    4. Sonia Bhalotra, 2007. "Spending to save? State health expenditure and infant mortality in India," Health Economics, John Wiley & Sons, Ltd., vol. 16(9), pages 911-928.
    5. Anton Eberhard & Orvika Rosnes & Maria Shkaratan & Haakon Vennemo, 2011. "Africa's Power Infrastructure : Investment, Integration, Efficiency," World Bank Publications, The World Bank, number 2290, July.
    6. Beraldo, Sergio & Montolio, Daniel & Turati, Gilberto, 2009. "Healthy, educated and wealthy: A primer on the impact of public and private welfare expenditures on economic growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 946-956, December.
    7. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
    8. Baldacci, Emanuele & Hillman, Arye L. & Kojo, Naoko C., 2004. "Growth, governance, and fiscal policy transmission channels in low-income countries," European Journal of Political Economy, Elsevier, vol. 20(3), pages 517-549, September.
    9. M. Emranul Haque & Richard Kneller, 2015. "Why does Public Investment Fail to Raise Economic Growth? The Role of Corruption," Manchester School, University of Manchester, vol. 83(6), pages 623-651, December.
    10. Mtiraoui, Abderraouf, 2015. "Control of corruption, Action of public power, Human capital and Economic development: Application two sectors of education and health in the MENA region," MPRA Paper 65004, University Library of Munich, Germany.
    11. Omar Azfar & Tugrul Gurgur, 2008. "Does corruption affect health outcomes in the Philippines?," Economics of Governance, Springer, vol. 9(3), pages 197-244, July.
    12. Ivaschenko, Oleksiy, 2005. "The patterns and determinants of longevity in Russia's regions: Evidence from panel data," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 788-813, December.
    13. Warlters, Michael & Auriol, Emmanuelle, 2005. "The marginal cost of public funds in Africa," Policy Research Working Paper Series 3679, The World Bank.
    14. Mária Lackó, 2006. "Tax Rates with Corruption: Labour-market Effects. Empirical Cross-country Comparisons on OECD Countries," IEHAS Discussion Papers 0604, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, revised 15 May 2006.
    15. McGuire, James W., 2006. "Basic health care provision and under-5 mortality: A Cross-National study of developing Countries," World Development, Elsevier, vol. 34(3), pages 405-425, March.
    16. Spinesi, Luca, 2009. "Rent-seeking bureaucracies, inequality, and growth," Journal of Development Economics, Elsevier, vol. 90(2), pages 244-257, November.
    17. Brian Levy, 2007. "Governance Reform : Bridging Monitoring and Action," World Bank Publications, The World Bank, number 6742, July.
    18. Luca, SPINESI, 2005. "Rent-Seeking Bureaucracies in a Schumpeterian Endogenous Growth Model : Effects on Human Capital Accumulation, Inequality and Growth," Discussion Papers (ECON - Département des Sciences Economiques) 2005027, Université catholique de Louvain, Département des Sciences Economiques.
    19. Deolalikar, Anil B. & Jamison, Dean T. & Laxminarayan, Ramanan, 2007. "India's Health Initiative: Financing Issues and Options," Discussion Papers dp-07-48, Resources For the Future.
    20. Stephen Everhart & Jorge Martinez- Vazquez & Robert McNab, 2009. "Corruption, governance, investment and growth in emerging markets," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1579-1594.
    21. Baldacci, Emanuele & Clements, Benedict & Gupta, Sanjeev & Cui, Qiang, 2008. "Social Spending, Human Capital, and Growth in Developing Countries," World Development, Elsevier, vol. 36(8), pages 1317-1341, August.
    22. Robert M. Marsh, 2014. "Getting Ahead and Falling Behind: A Sociological Elaboration of Sen's Theory of Human Development," Social Science Quarterly, Southwestern Social Science Association, vol. 95(4), pages 1001-1021, December.

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