Institutions and the Impact of Government Spending on Growth

James L. Butkiewicz · Halit Yanıkkaya

139 citations0/0 files storedJournal of Applied Economics

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Fiscal Policy and Economic Growth Economic Growth and Productivity Fiscal Policies and Political Economy

Abstract

This paper reports the results of a study of the impact of government expenditures on economic growth, emphasizing how government effectiveness influences the efficiency of government spending. The effects of sub-categories of government spending on growth are also examined. Total expenditures are estimated to have negative growth effects for some groupings of developed nations. Consumption expenditures are found to have a detrimental growth effect in developing nations with ineffective governments. Developing nations with ineffective governments benefit from capital expenditures. To stimulate growth, developing nations should limit their governments' consumption spending and invest in infrastructure.

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References

1990Institutions, Institutional Change and Economic Performance 1991Institutions, Institutional Change and Economic Performance 1991Economic Growth in a Cross Section of Countries 1989Economic Growth in a Cross Section of Countries 1999Why do Some Countries Produce So Much More Output Per Worker than Others?1999The quality of government 1997Africa's Growth Tragedy: Policies and Ethnic Divisions 1989Is public expenditure productive?

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