How Does the Composition of Public Spending Matter?
Public spending has effects which are complex to trace and difficult to quantify. But the composition of public expenditure has become the key instrument by which development agencies seek to promote economic development. In recent years, the development assistance to heavily indebted poor countries...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/03/5717794/composition-public-spending-matter http://hdl.handle.net/10986/8964 |
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okr-10986-89642021-04-23T14:02:42Z How Does the Composition of Public Spending Matter? Paternostro, Stefano Rajaram, Anand Tiongson, Erwin R. ADVERSE EFFECTS ADVOCACY ALTERNATIVE POLICY INSTRUMENTS BASIC NEEDS BENEFIT ANALYSIS CAPITAL FORMATION CONCEPTUAL FRAMEWORK DEBT DEBT RELIEF DEVELOPMENT STRATEGIES ECONOMIC ANALYSIS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS ECONOMISTS EDUCATIONAL ATTAINMENT EMPIRICAL ANALYSIS EMPIRICAL BASIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXPENDITURES EXTERNALITIES GOOD GOVERNANCE GOVERNMENT EXPENDITURES HEALTH CARE HEALTH INDICATORS HEALTH STATUS HEAVILY INDEBTED POOR COUNTRIES HIPC HUMAN DEVELOPMENT INCOME INCOME DISTRIBUTION INCOME INEQUALITY INTERNATIONAL ORGANIZATIONS LABOR FORCE LEARNING LIFE EXPECTANCY MARKET FAILURES NUTRITION POLICY INITIATIVES POLICY INSTRUMENTS POLICY MAKERS POLICY RESEARCH POVERTY REDUCTION PRIMARY HEALTH CARE PRIVATE SECTOR PRODUCTIVITY PROGRAMS PROPERTY RIGHTS PUBLIC EXPENDITURES PUBLIC GOODS PUBLIC INTERVENTION PUBLIC POLICIES PUBLIC SECTOR QUALITY OF SERVICES RESEARCH AGENDA RESOURCE ALLOCATION SAFETY SAFETY NETS SANITATION SAVINGS SCHOOLS SERVICE DELIVERY SOCIAL INDICATORS SOCIAL POLICIES SOCIAL SERVICES STRUCTURAL POLICIES STRUCTURAL REFORMS SUSTAINABLE POVERTY REDUCTION TAXATION TRADEOFFS WAGES WELFARE ECONOMICS WELFARE EFFECTS WORKERS Public spending has effects which are complex to trace and difficult to quantify. But the composition of public expenditure has become the key instrument by which development agencies seek to promote economic development. In recent years, the development assistance to heavily indebted poor countries (HIPCs) has been made conditional on increased expenditure on categories that are thought to be "pro-poor". This paper responds to the growing concern being expressed about the conceptual foundations and the empirical basis for the belief that poverty can be reduced through targeted public spending. While it is widely accepted that growth and redistribution are important sources of reduction in absolute poverty, a review of the literature confirms the lack of an appropriate theoretical framework for assessing the impact of public spending on growth as well as poverty. There is a need to combine principles of both public economics and growth theory to develop appropriate theoretical guidance for public expenditure policy. This paper identifies a number of approaches that are beginning to address this gap. Building on these approaches, it proposes a framework that has its foundation in a broadly articulated development strategy and its economic goals such as growth, equity, and poverty reduction. It recommends the use of public economics principles to clarify the roles of the private and public sectors and to recognize the complementarity of spending, taxation, and regulatory instruments available to affect public policy. With regard to the impact of any given type of public spending, policy recommendations must be tailored to countries and be based on empirical analysis that takes account of the lags and leads in their effects on equity and growth and ultimately on poverty. The paper sketches out such a framework as the first step in what will have to be a longer-term research agenda to provide theoretically and empirically robust and verifiable guidance to public spending policy. 2012-06-25T18:55:18Z 2012-06-25T18:55:18Z 2005-03 http://documents.worldbank.org/curated/en/2005/03/5717794/composition-public-spending-matter http://hdl.handle.net/10986/8964 English Policy Research Working Paper; No. 3555 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 |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
ADVERSE EFFECTS ADVOCACY ALTERNATIVE POLICY INSTRUMENTS BASIC NEEDS BENEFIT ANALYSIS CAPITAL FORMATION CONCEPTUAL FRAMEWORK DEBT DEBT RELIEF DEVELOPMENT STRATEGIES ECONOMIC ANALYSIS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS ECONOMISTS EDUCATIONAL ATTAINMENT EMPIRICAL ANALYSIS EMPIRICAL BASIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXPENDITURES EXTERNALITIES GOOD GOVERNANCE GOVERNMENT EXPENDITURES HEALTH CARE HEALTH INDICATORS HEALTH STATUS HEAVILY INDEBTED POOR COUNTRIES HIPC HUMAN DEVELOPMENT INCOME INCOME DISTRIBUTION INCOME INEQUALITY INTERNATIONAL ORGANIZATIONS LABOR FORCE LEARNING LIFE EXPECTANCY MARKET FAILURES NUTRITION POLICY INITIATIVES POLICY INSTRUMENTS POLICY MAKERS POLICY RESEARCH POVERTY REDUCTION PRIMARY HEALTH CARE PRIVATE SECTOR PRODUCTIVITY PROGRAMS PROPERTY RIGHTS PUBLIC EXPENDITURES PUBLIC GOODS PUBLIC INTERVENTION PUBLIC POLICIES PUBLIC SECTOR QUALITY OF SERVICES RESEARCH AGENDA RESOURCE ALLOCATION SAFETY SAFETY NETS SANITATION SAVINGS SCHOOLS SERVICE DELIVERY SOCIAL INDICATORS SOCIAL POLICIES SOCIAL SERVICES STRUCTURAL POLICIES STRUCTURAL REFORMS SUSTAINABLE POVERTY REDUCTION TAXATION TRADEOFFS WAGES WELFARE ECONOMICS WELFARE EFFECTS WORKERS |
| spellingShingle |
ADVERSE EFFECTS ADVOCACY ALTERNATIVE POLICY INSTRUMENTS BASIC NEEDS BENEFIT ANALYSIS CAPITAL FORMATION CONCEPTUAL FRAMEWORK DEBT DEBT RELIEF DEVELOPMENT STRATEGIES ECONOMIC ANALYSIS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS ECONOMISTS EDUCATIONAL ATTAINMENT EMPIRICAL ANALYSIS EMPIRICAL BASIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXPENDITURES EXTERNALITIES GOOD GOVERNANCE GOVERNMENT EXPENDITURES HEALTH CARE HEALTH INDICATORS HEALTH STATUS HEAVILY INDEBTED POOR COUNTRIES HIPC HUMAN DEVELOPMENT INCOME INCOME DISTRIBUTION INCOME INEQUALITY INTERNATIONAL ORGANIZATIONS LABOR FORCE LEARNING LIFE EXPECTANCY MARKET FAILURES NUTRITION POLICY INITIATIVES POLICY INSTRUMENTS POLICY MAKERS POLICY RESEARCH POVERTY REDUCTION PRIMARY HEALTH CARE PRIVATE SECTOR PRODUCTIVITY PROGRAMS PROPERTY RIGHTS PUBLIC EXPENDITURES PUBLIC GOODS PUBLIC INTERVENTION PUBLIC POLICIES PUBLIC SECTOR QUALITY OF SERVICES RESEARCH AGENDA RESOURCE ALLOCATION SAFETY SAFETY NETS SANITATION SAVINGS SCHOOLS SERVICE DELIVERY SOCIAL INDICATORS SOCIAL POLICIES SOCIAL SERVICES STRUCTURAL POLICIES STRUCTURAL REFORMS SUSTAINABLE POVERTY REDUCTION TAXATION TRADEOFFS WAGES WELFARE ECONOMICS WELFARE EFFECTS WORKERS Paternostro, Stefano Rajaram, Anand Tiongson, Erwin R. How Does the Composition of Public Spending Matter? |
| relation |
Policy Research Working Paper; No. 3555 |
| description |
Public spending has effects which are complex to trace and difficult to quantify. But the composition of public expenditure has become the key instrument by which development agencies seek to promote economic development. In recent years, the development assistance to heavily indebted poor countries (HIPCs) has been made conditional on increased expenditure on categories that are thought to be "pro-poor". This paper responds to the growing concern being expressed about the conceptual foundations and the empirical basis for the belief that poverty can be reduced through targeted public spending. While it is widely accepted that growth and redistribution are important sources of reduction in absolute poverty, a review of the literature confirms the lack of an appropriate theoretical framework for assessing the impact of public spending on growth as well as poverty. There is a need to combine principles of both public economics and growth theory to develop appropriate theoretical guidance for public expenditure policy. This paper identifies a number of approaches that are beginning to address this gap. Building on these approaches, it proposes a framework that has its foundation in a broadly articulated development strategy and its economic goals such as growth, equity, and poverty reduction. It recommends the use of public economics principles to clarify the roles of the private and public sectors and to recognize the complementarity of spending, taxation, and regulatory instruments available to affect public policy. With regard to the impact of any given type of public spending, policy recommendations must be tailored to countries and be based on empirical analysis that takes account of the lags and leads in their effects on equity and growth and ultimately on poverty. The paper sketches out such a framework as the first step in what will have to be a longer-term research agenda to provide theoretically and empirically robust and verifiable guidance to public spending policy. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Paternostro, Stefano Rajaram, Anand Tiongson, Erwin R. |
| author_facet |
Paternostro, Stefano Rajaram, Anand Tiongson, Erwin R. |
| author_sort |
Paternostro, Stefano |
| title |
How Does the Composition of Public Spending Matter? |
| title_short |
How Does the Composition of Public Spending Matter? |
| title_full |
How Does the Composition of Public Spending Matter? |
| title_fullStr |
How Does the Composition of Public Spending Matter? |
| title_full_unstemmed |
How Does the Composition of Public Spending Matter? |
| title_sort |
how does the composition of public spending matter? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/03/5717794/composition-public-spending-matter http://hdl.handle.net/10986/8964 |
| _version_ |
1764407149713162240 |