Fiscal Policy and Economic Development
June 1, 2008
Download PDF
More Formats on IMF eLibrary
Order a Print CopyDisclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary
This paper offers possible explanations for three generally observed facts about fiscal policy and development: (F1) The relative size of government increases as an economy develops, (F2) The rise in government and taxation are associated with rising or constant economic growth rates, and (F3) Today's developing countries have larger government sectors than did today's developed countries at similar stages of development. The explanations for these facts are based on the structural transformation from traditional (mostly agricultural) to modern (industrial and post-industrial) production, rising public infrastructure investment, and less representative governments in many of today's developing economies.
Subject: Labor, Labor productivity, Labor share, Public investment spending, Structural transformation
Keywords: developing country, economic growth, WP
Pages:
33
Volume:
2008
DOI:
Issue:
155
Series:
Working Paper No. 2008/155
Stock No:
WPIEA2008155
ISBN:
9781451870138
ISSN:
1018-5941
