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Public Spending and Inclusive Growth in Developing Asia

Author

Listed:
  • Benedict Clements

    (Universidad de Las Americas)

  • Sanjeev Gupta

    (Center for Global Development)

  • João Tovar Jalles

    (University of Lisbon-Lisbon School of Economics and Management (ISEG)
    Universidade de Lisboa-ISEG
    Universidade Nova de Lisboa-Nova School of Business and Economics IPAG Business School)

Abstract

This paper discusses the determinants of inclusive growth in developing Asia, with a focus on government expenditures. We find that higher levels of fiscal redistribution (through income taxes and direct transfers) increase the probability of achieving inclusive growth, as well as the level of government spending on health and education. To spur inclusive growth in the aftermath of the COVID pandemic, countries with limited fiscal space will need to focus on improving efficiency and reallocate existing outlays to activities that benefit low-income groups. Reallocating health spending toward primary care, and education spending toward primary and secondary education, would help lead to more equitable growth. There is also scope to better target social benefits to the poor.

Suggested Citation

  • Benedict Clements & Sanjeev Gupta & João Tovar Jalles, 2023. "Public Spending and Inclusive Growth in Developing Asia," Working Papers 653, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:653
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    More about this item

    Keywords

    income inequality; economic growth; inclusive growth; binary choice models; health expenditure; education; social protection;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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