{
  "title": "Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries",
  "publication": "IMF Working Papers, April 1, 2002",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/index.md",
  "summary": "This paper assesses the effects of expenditure composition as well as fiscal adjustment on economic growth in a sample of 39 low-income countries during the 1990s.",
  "sections": [
    {
      "heading": "Summary of purpose and scope",
      "content": "- Assesses the effects of expenditure composition and fiscal adjustment on economic growth.\n- Sample: 39 low-income countries during the 1990s.\n- Authors: Benedict J. Clements, Sanjeev Gupta, Emanuele Baldacci, Carlos Mulas-Granados.\n- Publication date: April 1, 2002.\n- Paper type: IMF Working Paper."
    },
    {
      "heading": "Key empirical findings",
      "content": "- Strong budgetary positions and fiscal consolidation are generally associated with higher economic growth in both the short and long terms.\n- Expenditure composition matters for growth:\n  - Countries where spending is concentrated on wages tend to have lower growth.\n  - Countries that allocate higher shares to capital and nonwage goods and services enjoy faster output expansion.\n- Expenditure composition, together with the size of the fiscal consolidation and initial fiscal conditions, affects the sustainability of adjustment.\n- Initial fiscal conditions influence the relationship between fiscal deficits and growth."
    },
    {
      "heading": "Policy implications and recommendations (drawn from findings)",
      "content": "- Pursue budgetary consolidation to support higher short-term and long-term economic growth.\n- Reorient public spending away from wage-concentrated composition toward higher shares of capital and nonwage goods and services to promote faster output expansion.\n- Design fiscal consolidations with attention to initial fiscal conditions to enhance the sustainability of adjustments.\n- Consider initial fiscal conditions when assessing the impact of fiscal deficits on growth and when sequencing fiscal reforms.\n\n---\n\n Content in this bundle\n\n- Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries - WP/02/77\n  - Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries - WP/02/77 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries - WP/02/77 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/bundle-manifest.json)",
    "Authors: Benedict J. Clements, Sanjeev Gupta, Emanuele Baldacci, Carlos Mulas-Granados",
    "Published: April 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451850000.001",
    "Assesses the effects of expenditure composition and fiscal adjustment on economic growth.",
    "Sample: 39 low-income countries during the 1990s.",
    "Authors: Benedict J. Clements, Sanjeev Gupta, Emanuele Baldacci, Carlos Mulas-Granados.",
    "Publication date: April 1, 2002.",
    "Paper type: IMF Working Paper.",
    "Strong budgetary positions and fiscal consolidation are generally associated with higher economic growth in both the short and long terms.",
    "Expenditure composition matters for growth:",
    "Expenditure composition, together with the size of the fiscal consolidation and initial fiscal conditions, affects the sustainability of adjustment.",
    "Initial fiscal conditions influence the relationship between fiscal deficits and growth.",
    "Pursue budgetary consolidation to support higher short-term and long-term economic growth.",
    "Reorient public spending away from wage-concentrated composition toward higher shares of capital and nonwage goods and services to promote faster output expansion.",
    "Design fiscal consolidations with attention to initial fiscal conditions to enhance the sustainability of adjustments.",
    "Consider initial fiscal conditions when assessing the impact of fiscal deficits on growth and when sequencing fiscal reforms.",
    "**Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries - WP/02/77**"
  ],
  "related": [
    {
      "title": "Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries - WP/02/77",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp0277.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp0277.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp0277.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/expenditure-composition-fiscal-adjustment-and-growth-in-low-income-countries-15769/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T06:12:27.014Z"
}