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Title:What is Happening with the Government Expenditure of Developing Countries - A Panel Data Study PDF Logo
Authors:Shonchoy, Abu
Issue Date:2010
Series/Report no.:Proceedings of the German Development Economics Conference, Hannover 2010 2
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.
Subjects:Government expenditure
Panel data
Corruption
Fractionalization
Governance.
JEL:E01
E02
E61
E62
H2
H4
H5
H6
O11
O5
Document Type:Conference Paper
Appears in Collections:Proceedings of the German Development Economics Conference, 2010 (Hannover)

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