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Public Spending and Deficits: Evidence from a Developing Economy

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  • Khan, Ashfaque H

Abstract

J. Buchanan and R. Wagner (1977) put forward a theoretical proposition that an increase in public spending is the result of the tolerance of large federal deficits. The empirical findings of this paper support their proposition for a developing country like Pakistan. This paper also finds that the growth of income is a powerful factor in the progressive increase in public spending. The evidence presented further suggests that productivity of the public sector in Pakistan is lower compared with the manufacturing sector. Such a productivity lag in the public sector may adversely affect the growth performance of the economy.

Suggested Citation

  • Khan, Ashfaque H, 1988. "Public Spending and Deficits: Evidence from a Developing Economy," Public Finance = Finances publiques, , vol. 43(3), pages 396-402.
    • Handle: RePEc:pfi:pubfin:v:43:y:1988:i:3:p:396-402
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    Cited by:

    1. Hondroyiannis, George & Papapetrou, Evangelia, 2001. "An Investigation of the Public Deficits and Government Spending Relationship: Evidence for Greece," Public Choice, Springer, vol. 107(1-2), pages 169-182, April.
    2. Facchini, Francois, 2014. "The determinants of public spending: a survey in a methodological perspective," MPRA Paper 53006, University Library of Munich, Germany.

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