PUBLIC SPENDING REALLOCATIONS AND ECONOMIC GROWTH ACROSS DIFFERENT INCOME LEVELS

This article examines the effects of public spending reallocations on economic growth. Assembling a disaggregated public spending dataset of 83 countries over the 1970–2011 period, we show that spending reallocations toward education, from health and social protection, have significant growth‐promoting effects across a wide range of countries' income levels. However, income heterogeneity matters, particularly when reallocations involve infrastructure spending. Specifically, a reallocation from this spending to education also promotes growth, albeit primarily when a country's income level is low. This occurs because the effects of infrastructure spending are particularly weak in low‐income countries, possibly due to the low quality of governance. (JEL O43, H50, O11)     

Uganda: No More Pro‐poor Growth?

This article explores changing growth regimes in Uganda, from pro‐poor growth in the 1990s to growth without poverty reduction, actually even with a slight increase in poverty, after 2000. Not surprisingly, it finds that good agricultural performance is the key determinant of direct pro‐poor growth in the 1990s, while lower agricultural growth is the root cause of the recent increase in poverty. At the same time, after 2000 low agricultural growth appears to have induced important employment shifts out of agriculture, which have dampened the increase in poverty. The article also assesses the indirect form of pro‐poor growth by analysing the incidence of public spending and the tax system, and finds that indirect pro‐poor growth has been achieved to only a limited extent.     

The People's Budget? Politics,Participation and Pro‐poor Policy

Recent moves towards ‘participatory’ budgeting have raised hopes and expectations that spending and revenue generation can be made more pro‐poor if informed citizens and their non‐traditional political organizations participate directly in budgeting decisions. This article reviews experiences of participatory budgeting and pro‐poor policy‐making in Brazil, Ireland, Chile, Mauritius, and Costa Rica. It draws attention to several important issues: Who participates? What kind of institutional framework is necessary? What happened to the revenue‐generation side of pro‐poor budgeting? It points out that making spending and taxation more ‘pro‐poor’ has historically depended on pro‐poor political parties gaining power.     

Federal Spending and Economic Growth in Appalachian Counties*

Abstract In this paper I use a model informed by key theories of regional processes, and I test three related hypotheses concerning the effects of different types of federal spending (public investment, defense, salaries/wages) on economic growth in the 399 Appalachian counties during recent business cycles. The analysis incorporates a maximum likelihood estimate spatial lag regression model and shows that federal public investment spending and defense spending exerted net positive effects on per capita income, civilian employment, and private nonfarm employment growth rates between 1983 and 1988. In addition, public investment spending had a positive relationship with percentage of earnings from mining for the 1983–1988 period. Federal spending, however, had less consistent effects during the 1989–1992 recession. Implications for theory and research on regional processes are discussed.     

Income distribution determinants and public spending efficiency

This paper examines the impact of public spending on income distribution in OECD countries, paying attention in particular to the impact of the quality of education and public institutions. The paper assesses the efficiency of public spending in improving income distribution by using Data Envelopment Analysis. The empirical analysis shows the existence of both input and output inefficiencies across countries when relating public social spending to the inequality in income distribution.     

SECTORAL COMPOSITION OF GOVERNMENT SPENDING AND MACROECONOMIC (IN)STABILITY

This article examines the quantitative interrelations between sectoral composition of public spending and equilibrium (in)determinacy in a two‐sector real business cycle model with positive productive externalities in investment. When government purchases of consumption and investment goods are set as constant fractions of their respective sectoral output, we show that the public‐consumption share plays no role in the model's local dynamics, and that a sufficiently high public‐investment share can stabilize the economy against endogenous belief‐driven cyclical fluctuations. When each type of government spending is postulated as a constant proportion of the economy's total output, we find that there exists a trade‐off between public consumption versus investment expenditures to yield saddle‐path stability and equilibrium uniqueness. (JEL E32, E62, O41)     

Macroeconomic policy tools to finance gender equality

Feminist economists and heterodox macroeconomists have contributed substantively to the body of research that explores the distributional effects of macro policies. This work explicitly addresses the livelihood problems created by neoliberalism and, in addition, it provides a pathway for identifying financing mechanisms. Building on earlier work by Seguino and Grown (2006), this article synthesizes and elaborates the major contributions of this body of gender and macro research and, from this, extrapolates macro‐level policies and tools that support gender equality. Among the tools identified is targeted government spending on physical and social infrastructure, the latter a relatively new conceptual tool that is discussed in detail. A key argument is that financing for gender equality that raises economy‐wide productivity can be self‐sustaining. As a result, both physical and social infrastructure spending have the ability to create fiscal space. This possibility offers a financing framework for gender equality expenditures. A contribution of this article is to critique mainstream monetary policies and identify alternative approaches that expand the toolkit to achieve gender equality goals.     

Social justice,care and developmental welfare in South Africa: a capabilities perspective

One of the paradoxes of the democratic project in South Africa is that the combination of political empowerment, organised constituencies of poor people and increasing social sector spending has made minimal impact on increasing equality. Despite an overall macroeconomic framework that emphasises fiscal restraint, social welfare spending has increased in the past 14 years, and dramatically so since 2003. Almost one in four South Africans receives some or other form of grant, and the majority of recipients are women. Indeed, South Africa is regularly described as the developing world’s largest and most generous welfare state. I address the extent to which gender inequalities are reduced through public sector spending, asking the question: what is the optimal relationship between social policy and the intrinsic democratic goals of equality, social justice and citizenship? Drawing on Amartya Sen’s capabilities approach, the article argues that a focus on social sector spending alone is inadequate to address questions of social justice. Instead, I draw attention to the normative assumptions, discursive environment and institutional context in which social policy is elaborated and implemented. I argue that, in a context in which there is relatively poor infrastructural capacity in the state to ensure that service delivery takes place in fair, consistent and egalitarian ways, households and communities act as shock absorbers of state failures and women’s gendered burdens increase, despite formal commitments to gender equality. While women appear to have gained from political empowerment, women politicians did not effectively leverage their position in the state to promote pro‐poor policies or to build coalitions to challenge the watering down of early commitments to reducing gender inequalities.     

Returns to Education: Exploring the Link Between Legislators’ Public School Degrees and State Spending on Higher Education*

The United States leads the world in public higher education, with a substantial amount of funding coming from state, rather than federal, government sources. Perhaps not surprisingly, the amount states contribute varies widely, leading researchers to explore the sources of such variation. While numerous factors have been shown to matter, the potential relevance of political representation remains unclear. To address this gap, the relationship between state legislators’ own educational backgrounds and state spending on higher education is tested. Utilizing a database of publicly available information on the educational backgrounds of 6,517 state senators and representatives, we find that states with a higher percentage of legislators who attended state colleges and/or universities invest more generously in public higher education than other state legislatures. Results support theories of representation, suggesting that legislators may be directly advocating for spending given their own educational profiles.     

E-government in China: deployment and driving forces of provincial government portals

Many countries expect e-government to increase the efficiency of public administration and revitalize government–citizen interaction. This paper reviews the existing research on e-government and expands it with a detailed examination of China, where e-government development is considered an important component of the national informatization strategy. To assess the status and driving factors of deployment, a detailed inventory of the e-government capacities of all Chinese provinces was created, allowing a more nuanced assessment than earlier studies. Although the data reveal that information delivery and basic interactional and communicative features dominate, the study also finds a range of advanced transactional and participatory services offered. Furthermore, despite strong guidance by the central government, distinct regional disparities are visible; these can be explained by differences in government spending on science and technology, economic resources, education, and urbanization rate.     

The Food Crisis and its Impacts on Poverty in Senegal and Mali: Crossed Destinies

This article uses two CGE macro‐micro models to analyse the distributional impact of the food crisis and policy responses in two neighbouring African countries, both of which are strongly dependent on agriculture. The approach captures structural differences at both the macro and micro level for household income and expenditure structures, and the results reveal differences for poverty impact at the national and sub‐group levels, as well as for inequality and pro‐poor analysis. The importance of country‐specific analysis and the risk of extrapolating conclusions from one country to another are also highlighted.     

The Graying of America and Support for Funding the Nation's Schools

Surveys spanning more than 35 years show that older Americansare less likely than younger citizens to endorse increased spendingon public schools. The conventional explanation for this generationalcleavage presumes that citizens’ interests change as theyapproach or transition into retirement—the absence ofschool-age children and fixed incomes combine to lower theirinterest in supporting spending increases for public education.We show that the conventional wisdom is incorrect, based ona confusion of age and cohort effects. Cohort-period analysisshows that every cohort becomes more supportive of educationalspending, rather than less, as they reach their 60s and 70s.The implications are important, for they suggest that the predicted"gray peril" to educational spending will not occur. Rather,our results suggest that public support for educational spendingwill continue its remarkable rise.     

SPENDING WISELY? HOW RESOURCES AFFECT KNOWLEDGE PRODUCTION IN UNIVERSITIES

Every year billions of dollars are spent on research grants to produce new knowledge in universities. However, as grants may also affect other research funding, the effects of financial resources on knowledge production remain unclear. To uncover how financial resources affect knowledge production, we study the effects of research spending itself. Utilizing the legal constraints on university spending from an endowment we develop an instrumental variables approach. Our approach instruments for university research spending with time‐series variation in stock prices interacted with cross‐sectional variation in initial endowment market values for research universities in the United States. Our analysis reveals that research spending has a substantial positive effect on the number of papers produced, but not their impact. We also demonstrate that research spending effects are quite similar at private and public universities. (JEL H5, I2, O3)     

THE EFFECT OF INSTITUTIONAL EXPENDITURES ON EMPLOYMENT OUTCOMES AND EARNINGS

In recent decades, public attention on colleges has risen in response to rising college expenditures and costs. This study uses the Education Longitudinal Study of 2002 to investigate how spending impacts salaries and employment outcomes, controlling for selection. Our findings indicate that spending on instruction increases salaries, the probability of full‐time employment, and job match, particularly for more disadvantaged students, while there are smaller benefits of spending on student services for less disadvantaged students. Spending on research has large positive impacts on salary and the probability of full‐time employment, especially for disadvantaged students. (JEL I20, J24)     

DO SUPPLY‐SIDE FORCES EXPLAIN GEOGRAPHIC VARIATION IN HEALTH CARE USE?

Regional variation in health care utilization has been well‐documented, yet uncertainty persists about whether this variation is primarily the result of supply‐side or demand‐side forces. We provide new evidence on this issue by examining changes in health care use for the near‐elderly as they transition from being uninsured into Medicare. Results support a causal, supply‐side explanation of regional variation. Estimates indicate that gaining Medicare coverage in above‐median spending regions increases the probability of at least one hospital visit by 40% and the probability of having more than five doctor visits by 26% relative to similar individuals in below‐median spending regions. (JEL D43, H42, H51, I1, I11, I13)     

Responses to global challenges: trends in aid‐financed global public goods

Based on four decades (1973–2013) of OECD‐Development Assistance Committee aid to developing countries, this article aims to show aid‐financed global public goods trends, their changing composition and their main drivers. In particular, a constant increase in the share of aid‐financed global public goods and a shift towards weighted‐sum and weakest‐link global goods are observed. Economic conditions, imitation effects, global engagement and domestic spending result as the main drivers of donors’ demand for aid‐financed global public goods. Besides, a certain complementarity in the provision of global goods plays a role, especially in European countries and Japan, partially easing the prognosis for the collective action problems related to global goods     

Boys Meet Girls’ Rights: Bolivian Adolescent Males’ Claims of Commitment to Gender Equality

This article describes a qualitative study exploring the effects of community‐based human rights and pro‐equality education on Bolivian adolescent boys. By privileging the boys’ own voices, the study examines how the boys’ sense of solidarity toward others, derived from the citizenship duties and collegiality emphasised in non‐governmental workshops, impacted their commitment to gender equality. Research implications include the importance of educating young males on females’ rights and listening to the boys’ views on the resulting progress and remaining challenges regarding the attainment of sustainable gender equality in social spheres and public policies.     

Myths and realities about input subsidies in sub‐Saharan Africa

Using a recent public expenditure dataset, this article proposes a ‘reality check’ of the level and composition of input subsidies in nine African countries between 2006 and 2013. Results show that input subsidies (1) received close to 35% of agricultural‐specific expenditure on average and (2) cover a variety of interventions, including investments in capital, such as on‐farm irrigation, and in on‐farm services, such as inspection or training. Further, the figures show that input subsidies tended to become entrenched in agricultural budgets over time, leading to sub‐optimal execution rates, and were primarily funded by the national taxpayer, while donors invested more in public goods. Findings confirm that input subsidies crowded out other spending categories likely to be more supportive of long‐term agricultural development objectives. The article concludes that the political economy of input subsidies should be directed to making more concrete efforts to attain a better balance of public expenditure on agriculture. Furthermore, policy‐makers should aim to increase the efficiency and policy coherence of input subsidies, since merely abolishing them is likely to be unfeasible in the short term.     

Federal Public Investment Spending and Economic Development in Appalachiai

Abstract This analysis examines the relationship between federal public investment spending and economic development in the special case of Appalachia. We propose that the effects of federal public investment spending on economic development operate indirectly through private capital accumulation. We use a spatial lag regression model to test our ideas for the 1980s and the 1990s. In the first step, we show that average federal public investment spending from 1983–1989 and 1993–1999 has net positive effects on measures of private capital accumulation in Appalachia. In the second step, we add three indicators of county economic development in 1989/1999 and find that earnings and nonfarm employment growth during the respective decades predicts higher levels of economic development at the end of the decades. However, while federal public investment spending has positive effects on measures of private capital accumulation, it has no direct effect on measures of economic development.