Assessing The Impact Of A Change In The Composition Of Public Spending

Author : Mr.Ivan Tchakarov,Mr.Roland Straub
Publisher : International Monetary Fund
Page : 49 pages
File Size : 55,8 Mb
Release : 2007-07-01
Category : Business & Economics
ISBN : 9781451867329

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Assessing the Impact of a Change in the Composition of Public Spending by Mr.Ivan Tchakarov,Mr.Roland Straub Pdf

Despite intense calls for safeguarding public investment in Europe, public investment expenditure, when measured in relation to GDP, has steadily fallen in the last three decades, evoking fears that economic activity may be correspondingly negatively affected. At the same time, however, public consumption in the EU-12 countries has trended up. In this paper, we provide a macroeconomic assessment of the observed change in the composition of public spending in the euro area in a medium-scale two-country dynamic stochastic general equilibrium (DSGE) model. First, we identify the channels through which both temporary and permanent public investment shocks generate larger fiscal multipliers than exogenous increases in public consumption. Second, we quantify the negative impact of a change in fiscal stance, characterized by a permanent rise in public consumption and a permanent fall in public investment, keeping the overall level of public spending constant. The key message of the paper is that calls for reversing the observed trend in the composition of public spending are well justified.

Author : Stefano Paternostro,Anand Rajaram,Erwin R. Tiongson
Publisher : Unknown
Page : 128 pages
File Size : 52,7 Mb
Release : 2012
Category : Electronic
ISBN : OCLC:931674544

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How Does the Composition of Public Spending Matter? by Stefano Paternostro,Anand Rajaram,Erwin R. Tiongson Pdf

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.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 56 pages
File Size : 55,8 Mb
Release : 2005-04-04
Category : Business & Economics
ISBN : 9781557755414

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Unproductive Public Expenditures by International Monetary Fund Pdf

Public expenditure policy, together with efforts to raise revenue,is at the core of efficient and equitable adjustment. Public expenditureproductivity has critical implications for fiscal adjustment, particularly as the competition for limited public resources intensifies.By providing a framework for defining and analyzing public expenditureproductivity and unproductive expenditures, this pamphlet discusseshow economic policymakers may approach these issues.

Author : Sanjay Pradhan
Publisher : World Bank Publications
Page : 150 pages
File Size : 45,5 Mb
Release : 1996-01-01
Category : Business & Economics
ISBN : 0821336339

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Evaluating Public Spending by Sanjay Pradhan Pdf

World Bank Discussion Paper No. 318. Analyzes the condition needed for achieving sustainable private sector growth in the Visegrad countries--the Czech Republic, Hungary, Poland, and the Slovak Republic. The analysis focuses on the legal and regulatory framework and institutional capacity, the privatization of state enterprises, and private sector development.

Author : Mr.Daniel Leigh,Mr.Andrea Pescatori,Mr.Jaime Guajardo
Publisher : International Monetary Fund
Page : 41 pages
File Size : 54,5 Mb
Release : 2011-07-01
Category : Business & Economics
ISBN : 9781455294695

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Expansionary Austerity New International Evidence by Mr.Daniel Leigh,Mr.Andrea Pescatori,Mr.Jaime Guajardo Pdf

This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest fiscal consolidation has contractionary effects on private domestic demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.

Author : Santiago Herrera
Publisher : World Bank Publications
Page : 68 pages
File Size : 47,6 Mb
Release : 2007
Category : Access to Finance
ISBN : 8210379456XXX

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public expenditure and growth by Santiago Herrera Pdf

Abstract: Given that public spending will have a positive impact on GDP if the benefits exceed the marginal cost of public funds, the present paper deals with measuring costs and benefits of public spending. The paper discusses one cost seldom considered in the literature and in policy debates, namely, the volatility derived from additional public spending. The paper identifies a relationship between public spending volatility and consumption volatility, which implies a direct welfare loss to society. This loss is substantial in developing countries, estimated at 8 percent of consumption. If welfare losses due to volatility are this sizeable, then measuring the benefits of public spending is critical. Gauging benefits based on macro aggregate data requires three caveats: a) considering of the impact of the funding (taxation) required for the additional public spending; b) differentiating between investment and capital formation; c) allowing for heterogeneous response of output to different types of capital and differences in network development. It is essential to go beyond country-specificity to project-level evaluation of the benefits and costs of public projects. From the micro viewpoint, the rate of return of a project must exceed the marginal cost of public funds, determined by tax levels and structure. Credible evaluations require microeconomic evidence and careful specification of counterfactuals. On this, the impact evaluation literature and methods play a critical role. From individual project evaluation, the analyst must contemplate the general equilibrium impacts. In general, the paper advocates for project evaluation as a central piece of any development platform. By increasing the efficiency of public spending, the government can permanently increase the rate of productivity growth and, hence, affect the growth rate of GDP.

Author : Vito Tanzi,Ludger Schuknecht
Publisher : Cambridge University Press
Page : 316 pages
File Size : 40,8 Mb
Release : 2000-06-05
Category : Business & Economics
ISBN : 0521664101

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Public Spending in the 20th Century by Vito Tanzi,Ludger Schuknecht Pdf

After a detailed account of reform experiences in several countries and the public debate regarding government reform, the study closes with an outlook on the future role of the state, a period when globalization may require and people may want "leaner" but not "meaner" states."--Jacket.

Author : Djeneba Doumbia,Mr.Tidiane Kinda
Publisher : International Monetary Fund
Page : 51 pages
File Size : 54,8 Mb
Release : 2019-09-06
Category : Business & Economics
ISBN : 9781513511863

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Reallocating Public Spending to Reduce Income Inequality: Can It Work? by Djeneba Doumbia,Mr.Tidiane Kinda Pdf

Can a government reduce income inequality by changing the composition of public spending while keeping the total level of expenditure fixed? Using newly assembled data on spending composition for 83 countries across all income groups, this paper shows that reallocating spending toward social protection and infrastructure is associated with reduced income inequality, particularly when it is financed through cuts in defense spending. However, the political and security situation matters. The analysis does not find evidence that lowering defense spending to finance infrastructure and social outlays improves income distribution in countries with weak institutions and at higher risk of conflict. Reallocating social protection and infrastructure spending towards other types of spending tends to increase income inequality. Accounting for the long-term impact of health spending, and particularly education spending, helps to better capture the equalizing effects of these expenditures. The paper includes a discussion of the implications of the findings for Indonesia, a major emerging market where income inequality is at the center of policy issues.

Author : Mr. Abdul Abiad,Davide Furceri,Petia Topalova
Publisher : International Monetary Fund
Page : 26 pages
File Size : 45,8 Mb
Release : 2015-05-04
Category : Business & Economics
ISBN : 9781484361559

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The Macroeconomic Effects of Public Investment by Mr. Abdul Abiad,Davide Furceri,Petia Topalova Pdf

This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment in a sample of 17 OECD economies since 1985 and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.

Author : Richard Hemming,Selma Mahfouz,Michael Kell
Publisher : International Monetary Fund
Page : 60 pages
File Size : 48,9 Mb
Release : 2002-12
Category : Business & Economics
ISBN : UCSD:31822032179210

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The Effectiveness of Fiscal Policy in Stimulating Economic Activity by Richard Hemming,Selma Mahfouz,Michael Kell Pdf

This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.

Author : Mr.Jack Diamond,Mr.Barry H. Potter
Publisher : International Monetary Fund
Page : 84 pages
File Size : 45,6 Mb
Release : 1999-07-01
Category : Business & Economics
ISBN : 1557757879

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Guidelines for Public Expenditure Management by Mr.Jack Diamond,Mr.Barry H. Potter Pdf

Traditionally, economics training in public finances has focused more on tax than public expenditure issues, and within expenditure, more on policy considerations than the more mundane matters of public expenditure management. For many years, the IMF's Public Expenditure Management Division has answered specific questions raised by fiscal economists on such missions. Based on this experience, these guidelines arose from the need to provide a general overview of the principles and practices observed in three key aspects of public expenditure management: budget preparation, budget execution, and cash planning. For each aspect of public expenditure management, the guidelines identify separately the differing practices in four groups of countries - the francophone systems, the Commonwealth systems, Latin America, and those in the transition economies. Edited by Barry H. Potter and Jack Diamond, this publication is intended for a general fiscal, or a general budget, advisor interested in the macroeconomic dimension of public expenditure management.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 30 pages
File Size : 42,9 Mb
Release : 1989-05-15
Category : Business & Economics
ISBN : 9781451974157

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Government Expenditure and Economic Growth by International Monetary Fund Pdf

This paper examines the empirical evidence on the contribution that government and, in particular, capital expenditure make to the growth performance of a sample of developing countries. Using the Denison growth accounting approach, this study finds that social expenditures may have a significant impact on growth in the short run, but infrastructure expenditures may have little influence. While current expenditures for directly productive purposes may exert a positive influence, capital expenditure in these sectors appears to exert a negative influence. Experiments with other explanatory variables confirm the importance of the growth of exports to the overall growth rate.

Author : Mr.David Amaglobeli,Wei Shi
Publisher : International Monetary Fund
Page : 24 pages
File Size : 50,7 Mb
Release : 2016-09-27
Category : Social Science
ISBN : 9781475536072

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How to Assess Fiscal Implications of Demographic Shifts by Mr.David Amaglobeli,Wei Shi Pdf

Over the next few decades, the world will experience significant demographic shifts, with material fiscal implications. In many advanced and emerging market economies, aging populations will lead to higher spending on pensions and health care. Moreover, projected population dynamics will adversely affect growth and government revenues. Building on and extending a 2015 IMF Staff Discussion Note by Clements and others, this note presents a simple framework that can assist researchers in quantifying the effects of demographic changes resulting from population aging on government fiscal balances. It includes two country applications of the framework and an associated template. The note addresses several key questions: What are channels through which demographic changes could affect public finances? How can we quantify the fiscal impact of demographic changes? How can we tailor the assessment to country-specific circumstances?

Author : Ali Sayigh
Publisher : Springer Nature
Page : 663 pages
File Size : 55,5 Mb
Release : 2019-11-30
Category : Technology & Engineering
ISBN : 9783030308414

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Green Buildings and Renewable Energy by Ali Sayigh Pdf

This book highlights selected papers presented during the bi-annual World Renewable Energy Network’s 2019 Med Green Forum. This international forum highlights the importance of growing renewable energy applications in two main sectors: Electricity Generation and Sustainable Building. The papers highlight the most current research and technological breakthroughs illustrating the viability of using renewable energy to satisfy energy needs. Coverage includes a broad range of renewable energy technologies and applications in all sectors – electricity production, heating and cooling, agricultural applications, water desalination, industrial applications, and transport. Presents leading-edge research in green building, sustainable architecture, and renewable energy; Covers a broad range of renewable energy technologies and applications in all sectors; Contains case studies and examples to enhance practical application of the technologies presented.

Author : Atul Sarma,V. B. Tulasidhar
Publisher : Concept Publishing Company
Page : 200 pages
File Size : 53,9 Mb
Release : 1984
Category : India
ISBN : 8210379456XXX

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Economic Impact of Government Expenditure by Atul Sarma,V. B. Tulasidhar Pdf