The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries

This paper presents a small-scale intertemporal model of endogenous growth that accounts for the composition of public expenditure and externalities associated with public capital. Government spending is disaggregated into various components, inclu...

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Main Authors:	Bayraktar, Nihal, Moreira, Emmanuel Pinto
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ADMINISTRATIVE COSTS ADVERSE EFFECTS BANK POLICY BASE YEAR BASELINE SCENARIO BENCHMARKING BORROWING BUDGET BALANCE BUDGET CONSTRAINT BUDGET CONSTRAINTS BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CALCULATIONS CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL FORMATION CAPITAL SPENDING CAPITAL STOCK CAPITAL STOCKS CASH BASIS CIVIL LIBERTIES COMMODITIES COMMODITY COMPOSITION OF GOVERNMENT SPENDING COMPOSITION OF PUBLIC SPENDING CONSUMPTION SMOOTHING CONSUMPTION TAXES CONTRIBUTION CURRENT ACCOUNT DEBT DEBT SUSTAINABILITY DEFICITS DEPRECIATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCOUNT RATE DISCOUNTED VALUE DOMESTIC DEBT DOMESTIC MARKET ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RESEARCH ECONOMIC SECURITY EDUCATED INDIVIDUALS EDUCATION EXPENDITURES EDUCATION SERVICES EDUCATION SYSTEM EDUCATIONAL SYSTEMS EFFICIENCY OF RESOURCE ALLOCATION ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY EQUATIONS EQUILIBRIUM EXCESS DEMAND EXPENDITURES EXPROPRIATION EXPROPRIATION RISKS EXTERNAL DEBT EXTERNAL FINANCING EXTERNALITIES FISCAL ACCOUNTS FISCAL ADJUSTMENT FISCAL BALANCE FISCAL MANAGEMENT FISCAL POLICY FISCAL REFORMS FIXED CAPITAL GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT EXPENDITURE GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH MODEL GROWTH RATE HEALTH CARE HEALTH SERVICES HOUSEHOLD SPENDING HUMAN CAPITAL INCOME DISTRIBUTION INCOME TAX INCOME TAXES INCREASING RETURNS INFRASTRUCTURE SERVICES INTEREST EXPENDITURE INTEREST PAYMENTS INTEREST RATE INTERNATIONAL BANK INVENTORY INVESTMENT DECISIONS INVESTMENT SPENDING LABOR FORCE LIQUIDITY LIQUIDITY CONSTRAINTS LITERACY LIVING STANDARDS LOW-INCOME MACROECONOMIC FRAMEWORK MACROECONOMICS MARGINAL PRODUCT MARGINAL PRODUCTIVITY MARGINAL UTILITY MARGINAL UTILITY OF CONSUMPTION MARKET PRICES MAXIMUM LIKELIHOOD ESTIMATION MISMANAGEMENT MONETARY FUND NATIONAL ACCOUNTS NET REVENUE OPEN ECONOMY OPTIMAL TAXATION OUTPUT PER CAPITA OUTPUT RATIO PERSONAL INCOME PERSONAL INCOME TAX PHYSICAL ASSETS POLITICAL ECONOMY POLITICAL STABILITY POVERTY RATE POVERTY REDUCTION POVERTY REDUCTION STRATEGIES PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE CONSUMPTION PRIVATE INVESTMENT PRIVATE SAVING PRIVATE SAVINGS PRIVATE SECTOR PRIVATE SPENDING PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVE CAPITAL PRODUCTIVITY PROPERTY RIGHTS PUBLIC PUBLIC ADMINISTRATION PUBLIC CAPITAL PUBLIC DEBT PUBLIC DEFICITS PUBLIC DISCLOSURE PUBLIC EDUCATION PUBLIC EMPLOYEES PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEWS PUBLIC GOODS PUBLIC HEALTH PUBLIC HEALTH SERVICES PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT SPENDING PUBLIC PRODUCTION PUBLIC RESOURCES PUBLIC SCHOOLS PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR WAGES PUBLIC SERVICES PUBLIC SPENDING RATE OF GROWTH RATIO OF PUBLIC SPENDING REAL GDP REMITTANCES RESOURCE ALLOCATION RETURN RETURNS RISK OF EXPROPRIATION RISK OF REPUDIATION ROADS RULE OF LAW SALARIES SAVING BEHAVIOR SAVINGS SENIOR SIDE EFFECTS STATE UNIVERSITY STOCKS TAX COLLECTION TAX INCOME TAX RATE TAX RATES TAX REFORM TAX REVENUES TAX SYSTEMS TAXATION TELECOMMUNICATIONS TELEPHONE LINES TERRORISM TOTAL DEBT TOTAL EXPENDITURE TOTAL PUBLIC EXPENDITURE TOTAL REVENUE TOTAL SPENDING UNCERTAINTY UNEMPLOYMENT UNSKILLED WORKERS UTILITY FUNCTION VALUABLE WAGE WAGE INCOME WAGES WEALTH WEALTH EFFECT WORTH
Online Access:	http://documents.worldbank.org/curated/en/2007/12/8841616/composition-public-expenditure-growth-small-scale-intertemporal-model-low-income-countries http://hdl.handle.net/10986/7595

id	okr-10986-7595
recordtype	oai_dc
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ADMINISTRATIVE COSTS ADVERSE EFFECTS BANK POLICY BASE YEAR BASELINE SCENARIO BENCHMARKING BORROWING BUDGET BALANCE BUDGET CONSTRAINT BUDGET CONSTRAINTS BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CALCULATIONS CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL FORMATION CAPITAL SPENDING CAPITAL STOCK CAPITAL STOCKS CASH BASIS CIVIL LIBERTIES COMMODITIES COMMODITY COMPOSITION OF GOVERNMENT SPENDING COMPOSITION OF PUBLIC SPENDING CONSUMPTION SMOOTHING CONSUMPTION TAXES CONTRIBUTION CURRENT ACCOUNT DEBT DEBT SUSTAINABILITY DEFICITS DEPRECIATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCOUNT RATE DISCOUNTED VALUE DOMESTIC DEBT DOMESTIC MARKET ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RESEARCH ECONOMIC SECURITY EDUCATED INDIVIDUALS EDUCATION EXPENDITURES EDUCATION SERVICES EDUCATION SYSTEM EDUCATIONAL SYSTEMS EFFICIENCY OF RESOURCE ALLOCATION ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY EQUATIONS EQUILIBRIUM EXCESS DEMAND EXPENDITURES EXPROPRIATION EXPROPRIATION RISKS EXTERNAL DEBT EXTERNAL FINANCING EXTERNALITIES FISCAL ACCOUNTS FISCAL ADJUSTMENT FISCAL BALANCE FISCAL MANAGEMENT FISCAL POLICY FISCAL REFORMS FIXED CAPITAL GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT EXPENDITURE GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH MODEL GROWTH RATE HEALTH CARE HEALTH SERVICES HOUSEHOLD SPENDING HUMAN CAPITAL INCOME DISTRIBUTION INCOME TAX INCOME TAXES INCREASING RETURNS INFRASTRUCTURE SERVICES INTEREST EXPENDITURE INTEREST PAYMENTS INTEREST RATE INTERNATIONAL BANK INVENTORY INVESTMENT DECISIONS INVESTMENT SPENDING LABOR FORCE LIQUIDITY LIQUIDITY CONSTRAINTS LITERACY LIVING STANDARDS LOW-INCOME MACROECONOMIC FRAMEWORK MACROECONOMICS MARGINAL PRODUCT MARGINAL PRODUCTIVITY MARGINAL UTILITY MARGINAL UTILITY OF CONSUMPTION MARKET PRICES MAXIMUM LIKELIHOOD ESTIMATION MISMANAGEMENT MONETARY FUND NATIONAL ACCOUNTS NET REVENUE OPEN ECONOMY OPTIMAL TAXATION OUTPUT PER CAPITA OUTPUT RATIO PERSONAL INCOME PERSONAL INCOME TAX PHYSICAL ASSETS POLITICAL ECONOMY POLITICAL STABILITY POVERTY RATE POVERTY REDUCTION POVERTY REDUCTION STRATEGIES PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE CONSUMPTION PRIVATE INVESTMENT PRIVATE SAVING PRIVATE SAVINGS PRIVATE SECTOR PRIVATE SPENDING PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVE CAPITAL PRODUCTIVITY PROPERTY RIGHTS PUBLIC PUBLIC ADMINISTRATION PUBLIC CAPITAL PUBLIC DEBT PUBLIC DEFICITS PUBLIC DISCLOSURE PUBLIC EDUCATION PUBLIC EMPLOYEES PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEWS PUBLIC GOODS PUBLIC HEALTH PUBLIC HEALTH SERVICES PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT SPENDING PUBLIC PRODUCTION PUBLIC RESOURCES PUBLIC SCHOOLS PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR WAGES PUBLIC SERVICES PUBLIC SPENDING RATE OF GROWTH RATIO OF PUBLIC SPENDING REAL GDP REMITTANCES RESOURCE ALLOCATION RETURN RETURNS RISK OF EXPROPRIATION RISK OF REPUDIATION ROADS RULE OF LAW SALARIES SAVING BEHAVIOR SAVINGS SENIOR SIDE EFFECTS STATE UNIVERSITY STOCKS TAX COLLECTION TAX INCOME TAX RATE TAX RATES TAX REFORM TAX REVENUES TAX SYSTEMS TAXATION TELECOMMUNICATIONS TELEPHONE LINES TERRORISM TOTAL DEBT TOTAL EXPENDITURE TOTAL PUBLIC EXPENDITURE TOTAL REVENUE TOTAL SPENDING UNCERTAINTY UNEMPLOYMENT UNSKILLED WORKERS UTILITY FUNCTION VALUABLE WAGE WAGE INCOME WAGES WEALTH WEALTH EFFECT WORTH
spellingShingle	ADMINISTRATIVE COSTS ADVERSE EFFECTS BANK POLICY BASE YEAR BASELINE SCENARIO BENCHMARKING BORROWING BUDGET BALANCE BUDGET CONSTRAINT BUDGET CONSTRAINTS BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CALCULATIONS CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL FORMATION CAPITAL SPENDING CAPITAL STOCK CAPITAL STOCKS CASH BASIS CIVIL LIBERTIES COMMODITIES COMMODITY COMPOSITION OF GOVERNMENT SPENDING COMPOSITION OF PUBLIC SPENDING CONSUMPTION SMOOTHING CONSUMPTION TAXES CONTRIBUTION CURRENT ACCOUNT DEBT DEBT SUSTAINABILITY DEFICITS DEPRECIATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCOUNT RATE DISCOUNTED VALUE DOMESTIC DEBT DOMESTIC MARKET ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RESEARCH ECONOMIC SECURITY EDUCATED INDIVIDUALS EDUCATION EXPENDITURES EDUCATION SERVICES EDUCATION SYSTEM EDUCATIONAL SYSTEMS EFFICIENCY OF RESOURCE ALLOCATION ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY EQUATIONS EQUILIBRIUM EXCESS DEMAND EXPENDITURES EXPROPRIATION EXPROPRIATION RISKS EXTERNAL DEBT EXTERNAL FINANCING EXTERNALITIES FISCAL ACCOUNTS FISCAL ADJUSTMENT FISCAL BALANCE FISCAL MANAGEMENT FISCAL POLICY FISCAL REFORMS FIXED CAPITAL GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT EXPENDITURE GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH MODEL GROWTH RATE HEALTH CARE HEALTH SERVICES HOUSEHOLD SPENDING HUMAN CAPITAL INCOME DISTRIBUTION INCOME TAX INCOME TAXES INCREASING RETURNS INFRASTRUCTURE SERVICES INTEREST EXPENDITURE INTEREST PAYMENTS INTEREST RATE INTERNATIONAL BANK INVENTORY INVESTMENT DECISIONS INVESTMENT SPENDING LABOR FORCE LIQUIDITY LIQUIDITY CONSTRAINTS LITERACY LIVING STANDARDS LOW-INCOME MACROECONOMIC FRAMEWORK MACROECONOMICS MARGINAL PRODUCT MARGINAL PRODUCTIVITY MARGINAL UTILITY MARGINAL UTILITY OF CONSUMPTION MARKET PRICES MAXIMUM LIKELIHOOD ESTIMATION MISMANAGEMENT MONETARY FUND NATIONAL ACCOUNTS NET REVENUE OPEN ECONOMY OPTIMAL TAXATION OUTPUT PER CAPITA OUTPUT RATIO PERSONAL INCOME PERSONAL INCOME TAX PHYSICAL ASSETS POLITICAL ECONOMY POLITICAL STABILITY POVERTY RATE POVERTY REDUCTION POVERTY REDUCTION STRATEGIES PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE CONSUMPTION PRIVATE INVESTMENT PRIVATE SAVING PRIVATE SAVINGS PRIVATE SECTOR PRIVATE SPENDING PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVE CAPITAL PRODUCTIVITY PROPERTY RIGHTS PUBLIC PUBLIC ADMINISTRATION PUBLIC CAPITAL PUBLIC DEBT PUBLIC DEFICITS PUBLIC DISCLOSURE PUBLIC EDUCATION PUBLIC EMPLOYEES PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEWS PUBLIC GOODS PUBLIC HEALTH PUBLIC HEALTH SERVICES PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT SPENDING PUBLIC PRODUCTION PUBLIC RESOURCES PUBLIC SCHOOLS PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR WAGES PUBLIC SERVICES PUBLIC SPENDING RATE OF GROWTH RATIO OF PUBLIC SPENDING REAL GDP REMITTANCES RESOURCE ALLOCATION RETURN RETURNS RISK OF EXPROPRIATION RISK OF REPUDIATION ROADS RULE OF LAW SALARIES SAVING BEHAVIOR SAVINGS SENIOR SIDE EFFECTS STATE UNIVERSITY STOCKS TAX COLLECTION TAX INCOME TAX RATE TAX RATES TAX REFORM TAX REVENUES TAX SYSTEMS TAXATION TELECOMMUNICATIONS TELEPHONE LINES TERRORISM TOTAL DEBT TOTAL EXPENDITURE TOTAL PUBLIC EXPENDITURE TOTAL REVENUE TOTAL SPENDING UNCERTAINTY UNEMPLOYMENT UNSKILLED WORKERS UTILITY FUNCTION VALUABLE WAGE WAGE INCOME WAGES WEALTH WEALTH EFFECT WORTH Bayraktar, Nihal Moreira, Emmanuel Pinto The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries
relation	Policy Research Working Paper; No. 4430
description	This paper presents a small-scale intertemporal model of endogenous growth that accounts for the composition of public expenditure and externalities associated with public capital. Government spending is disaggregated into various components, including maintenance, security, and investment in education, health, and core infrastructure. After studying its long-run properties, the model is calibrated for Haiti, using country-specific information as well as parameter estimates from the literature. A variety of policy experiments are then reported, including a reallocation of spending aimed at creating fiscal space to promote public investment; an improvement in fiscal management that leads to a reduction in tax collection costs; higher spending on security; and a composite fiscal package.
format	Publications & Research :: Policy Research Working Paper
author	Bayraktar, Nihal Moreira, Emmanuel Pinto
author_facet	Bayraktar, Nihal Moreira, Emmanuel Pinto
author_sort	Bayraktar, Nihal
title	The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries
title_short	The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries
title_full	The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries
title_fullStr	The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries
title_full_unstemmed	The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries
title_sort	composition of public expenditure and growth : a small-scale intertemporal model for low-income countries
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2007/12/8841616/composition-public-expenditure-growth-small-scale-intertemporal-model-low-income-countries http://hdl.handle.net/10986/7595
_version_	1764402799874932736
spelling	okr-10986-75952021-04-23T14:02:34Z The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries Bayraktar, Nihal Moreira, Emmanuel Pinto ADMINISTRATIVE COSTS ADVERSE EFFECTS BANK POLICY BASE YEAR BASELINE SCENARIO BENCHMARKING BORROWING BUDGET BALANCE BUDGET CONSTRAINT BUDGET CONSTRAINTS BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CALCULATIONS CAPITAL ACCUMULATION CAPITAL EXPENDITURE CAPITAL FORMATION CAPITAL SPENDING CAPITAL STOCK CAPITAL STOCKS CASH BASIS CIVIL LIBERTIES COMMODITIES COMMODITY COMPOSITION OF GOVERNMENT SPENDING COMPOSITION OF PUBLIC SPENDING CONSUMPTION SMOOTHING CONSUMPTION TAXES CONTRIBUTION CURRENT ACCOUNT DEBT DEBT SUSTAINABILITY DEFICITS DEPRECIATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCOUNT RATE DISCOUNTED VALUE DOMESTIC DEBT DOMESTIC MARKET ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RESEARCH ECONOMIC SECURITY EDUCATED INDIVIDUALS EDUCATION EXPENDITURES EDUCATION SERVICES EDUCATION SYSTEM EDUCATIONAL SYSTEMS EFFICIENCY OF RESOURCE ALLOCATION ELASTICITIES ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY EQUATIONS EQUILIBRIUM EXCESS DEMAND EXPENDITURES EXPROPRIATION EXPROPRIATION RISKS EXTERNAL DEBT EXTERNAL FINANCING EXTERNALITIES FISCAL ACCOUNTS FISCAL ADJUSTMENT FISCAL BALANCE FISCAL MANAGEMENT FISCAL POLICY FISCAL REFORMS FIXED CAPITAL GDP GDP PER CAPITA GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT EXPENDITURE GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GROWTH MODEL GROWTH RATE HEALTH CARE HEALTH SERVICES HOUSEHOLD SPENDING HUMAN CAPITAL INCOME DISTRIBUTION INCOME TAX INCOME TAXES INCREASING RETURNS INFRASTRUCTURE SERVICES INTEREST EXPENDITURE INTEREST PAYMENTS INTEREST RATE INTERNATIONAL BANK INVENTORY INVESTMENT DECISIONS INVESTMENT SPENDING LABOR FORCE LIQUIDITY LIQUIDITY CONSTRAINTS LITERACY LIVING STANDARDS LOW-INCOME MACROECONOMIC FRAMEWORK MACROECONOMICS MARGINAL PRODUCT MARGINAL PRODUCTIVITY MARGINAL UTILITY MARGINAL UTILITY OF CONSUMPTION MARKET PRICES MAXIMUM LIKELIHOOD ESTIMATION MISMANAGEMENT MONETARY FUND NATIONAL ACCOUNTS NET REVENUE OPEN ECONOMY OPTIMAL TAXATION OUTPUT PER CAPITA OUTPUT RATIO PERSONAL INCOME PERSONAL INCOME TAX PHYSICAL ASSETS POLITICAL ECONOMY POLITICAL STABILITY POVERTY RATE POVERTY REDUCTION POVERTY REDUCTION STRATEGIES PRIVATE CAPITAL PRIVATE CAPITAL STOCK PRIVATE CONSUMPTION PRIVATE INVESTMENT PRIVATE SAVING PRIVATE SAVINGS PRIVATE SECTOR PRIVATE SPENDING PRODUCTION FUNCTIONS PRODUCTION INPUTS PRODUCTIVE CAPITAL PRODUCTIVITY PROPERTY RIGHTS PUBLIC PUBLIC ADMINISTRATION PUBLIC CAPITAL PUBLIC DEBT PUBLIC DEFICITS PUBLIC DISCLOSURE PUBLIC EDUCATION PUBLIC EMPLOYEES PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEWS PUBLIC GOODS PUBLIC HEALTH PUBLIC HEALTH SERVICES PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC INVESTMENT SPENDING PUBLIC PRODUCTION PUBLIC RESOURCES PUBLIC SCHOOLS PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR WAGES PUBLIC SERVICES PUBLIC SPENDING RATE OF GROWTH RATIO OF PUBLIC SPENDING REAL GDP REMITTANCES RESOURCE ALLOCATION RETURN RETURNS RISK OF EXPROPRIATION RISK OF REPUDIATION ROADS RULE OF LAW SALARIES SAVING BEHAVIOR SAVINGS SENIOR SIDE EFFECTS STATE UNIVERSITY STOCKS TAX COLLECTION TAX INCOME TAX RATE TAX RATES TAX REFORM TAX REVENUES TAX SYSTEMS TAXATION TELECOMMUNICATIONS TELEPHONE LINES TERRORISM TOTAL DEBT TOTAL EXPENDITURE TOTAL PUBLIC EXPENDITURE TOTAL REVENUE TOTAL SPENDING UNCERTAINTY UNEMPLOYMENT UNSKILLED WORKERS UTILITY FUNCTION VALUABLE WAGE WAGE INCOME WAGES WEALTH WEALTH EFFECT WORTH This paper presents a small-scale intertemporal model of endogenous growth that accounts for the composition of public expenditure and externalities associated with public capital. Government spending is disaggregated into various components, including maintenance, security, and investment in education, health, and core infrastructure. After studying its long-run properties, the model is calibrated for Haiti, using country-specific information as well as parameter estimates from the literature. A variety of policy experiments are then reported, including a reallocation of spending aimed at creating fiscal space to promote public investment; an improvement in fiscal management that leads to a reduction in tax collection costs; higher spending on security; and a composite fiscal package. 2012-06-08T20:43:50Z 2012-06-08T20:43:50Z 2007-12 http://documents.worldbank.org/curated/en/2007/12/8841616/composition-public-expenditure-growth-small-scale-intertemporal-model-low-income-countries http://hdl.handle.net/10986/7595 English Policy Research Working Paper; No. 4430 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research

The Composition of Public Expenditure and Growth : A Small-Scale Intertemporal Model for Low-Income Countries

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