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Governments can improve the distribution of income an also can eradicate extreme poverty by changing the composition and direction of their public expenditure. But more important than the capacity of the fiscal budget to transfer income is its use to increase the consumption of such basic needs as housing, water, sewerage, and health and education services. Such use would permit the poorest groups in the population to enjoy higher levels of consumption at an earlier stage of development than would be the case if private forces of supply and demand alone were acting during the normal course of per capita income growth. What is the present performance of developing countries in reaching the poorest income groups through public expenditures? How has this performance evolved overtime? Are there constraints on the consumption of basic services other than the mere availability or supply of these services? This research study addresses these questions with the help of a case study carried out in Colombia.
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