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What is Happening with the Government Expenditure of Developing Countries - A Panel Data Study

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Abstract

The paper focuses on the recent pattern of government expenditure for developing countries and estimates the determinants which may have influenced government expenditure. Using a panel data set for 111 developing countries from 1984 to 2004, this study finds evidence that political and institutional variables as well as governance variables significantly influence government expenditure. Among other results, the paper finds new evidence of Wagner's law which states that peoples' demand for service and willingness to pay is income-elastic hence the expansion of public economy is influenced by the greater economic influence of a nation Cameron (1978). Corruption is found to be influential in explaining the public expenditure of developing countries. On the contrary, size of the economy and linguistic fractionalization is found to have significant negative association over government expenditure. The study finds that military governments are more conservative in terms of large public expenditure other than spending on defence equipments.

Suggested Citation

  • Shonchoy, Abu, 2010. "What is Happening with the Government Expenditure of Developing Countries - A Panel Data Study," Proceedings of the German Development Economics Conference, Hannover 2010 2, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec10:2
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    Cited by:

    1. Sadia Shabbir & Hafiz M. Yasin, 2015. "Implications of Public External Debt for Social Spending: A Case Study of Selected Asian Developing Countries," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(1), pages 71-103, Jan-June.
    2. Ezebuilo Romanus Ukwueze, 2015. "Determinants of the Size of Public Expenditure in Nigeria," SAGE Open, , vol. 5(4), pages 21582440156, December.
    3. Gratiela Georgiana Noja & Mirela Cristea & Eleftherios Thalassinos & Marta Kadłubek, 2021. "Interlinkages between Government Resources Management, Environmental Support, and Good Public Governance. Advanced Insights from the European Union," Resources, MDPI, vol. 10(5), pages 1-23, April.
    4. Siburian, Matondang Elsa, 2021. "Fiscal Decentralization, Regional Income Inequality, and the Provision of Local Public Goods: Evidence from Indonesia," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 46(4), pages 87-103, December.
    5. Kelkar, Vijay & Shah, Ajay, 2011. "Indian social democracy: The resource perspective," Working Papers 11/82, National Institute of Public Finance and Policy.
    6. Felix Kimtai Kiminyei, 2019. "Empirical Investigation on the Relationship among Kenyan Public Debt, Tax Revenue and Government Expenditure," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(1), pages 142-159, March.
    7. Matondang Elsa Siburian, 2020. "Fiscal Decentralization, Regional Income Inequality, and the Provision of Local Public Goods: Evidence from Indonesia," Working Papers 2001, Waseda University, Faculty of Political Science and Economics.
    8. Yasuhiro Nakamoto & Taketo Kawagishi, 2021. "The Impacts of Temporary and Permanent Public Health Policies on HRQOL in a Small Open Economy," Sustainability, MDPI, vol. 13(17), pages 1-33, September.
    9. repec:lje:journl:v:20:y:2015:i:1:p:71-103 is not listed on IDEAS

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    More about this item

    Keywords

    Government expenditure; Panel data; Corruption; Fractionalization; Governance.;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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