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There is unlikely to be agreement about why government grows (much less whether or not this is beneficial) until there is some clearer notion of what is to be measured. Public revenues and expenditures are surely not sufficient to reflect the scope of the public sector, but what should be included? A distinguished international group of scholars consider the number of people employed, the extent of services performed, the quantity of laws enacted, and the degree of regulation enforced. @3`...the book marks a significant step forward for a body of research that has typically been more concerned with normative and theoretical issues.' -- Journal of Policy Analysis & Management, Summer 1984 @3`This scho
A range of factors drive size of government: relative prices, the age-dependency ratio, how long a country has been independent, relative political freedom, and openness in trade. Larger governments tend to limit growth, but that tendency can be offset by well-functioning institutions and high-quality bureaucracy. Size of government is not the only issue that matters.Using a large cross-country data set, Commander, Davoodi, and Lee examine the factors that cause governments to grow and analyze how the size of government affects growth, whether measured as income growth or other measures of well-being, such as infant mortality and life expectancy. They find no robust link between government size and per capita income. The factors they find to be important in explaining government size are relative prices, the age-dependency ratio, how long a country has been independent, relative political freedom, and openness in trade. Their results also partially support the view that governments use consumption to buffer external risk, especially in low-income countries.As for how government size affects growth, they find a robust and significant negative relationship between growth and government size, as measured by consumption. Policy distortions, predictably, also have a negative effect on growth. But the positive effects of well-functioning institutions and high quality in government bureaucracies can offset the negative influence of large government size alone.Finally, they find that social-sector spending can exert a positive influence by reducing infant mortality and raising life expectancy. Better income distribution, higher per capita income, higher per capita income growth, and more political freedom have the same positive effect on those two measures of well-being.This paper - a joint product of the Office of the Senior Vice President, Development Economics and Chief Economist, and New Products and Outreach Division, Economic Development Institute - was prepared as a background paper for World Development Report 1997 on the role of the state in a changing world.
This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest fiscal consolidation has contractionary effects on private domestic demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.
How does social spending relate to economic growth and which countries have got this right and wrong? Peter Lindert examines the experience of countries across the globe to reveal what has worked, what needs changing, and who the winners and losers are under different systems. He traces the development of public education, health care, pensions, and welfare provision, and addresses key questions around intergenerational inequality and fiscal redistribution, the returns to investment in human capital, how to deal with an aging population, whether migration is a cost or a benefit, and how social spending differs in autocracies and democracies. The book shows that what we need to do above all is to invest more in the young from cradle to career, and shift the burden of paying for social insurance away from the workplace and to society as a whole.
In Ordering Violence, Paul Staniland advances a broad approach to armed politics—bringing together governments, insurgents, militias, and armed political parties in a shared framework—to argue that governments' perception of the ideological threats posed by armed groups drive their responses and interactions. Staniland combines a unique new dataset of state-group armed orders in India, Pakistan, Burma/Myanmar, and Sri Lanka with detailed case studies from the region to explore when and how this model of threat perception provides insight into patterns of repression, collusion, and mutual neglect across nearly seven decades. Instead of straightforwardly responding to the material or organizational power of armed groups, Staniland finds, regimes assess how a group's politics align with their own ideological projects. Explaining, for example, why governments often use extreme repression against weak groups even while working with or tolerating more powerful armed actors, Ordering Violence provides a comprehensive overview of South Asia's complex armed politics, embedded within an analytical framework that can also speak broadly beyond the subcontinent.
Rapid economic development has been a boon to human well-being, but comes at a significant cost to the fertile soils, forests, coastal marshes, and farmland that support all life on earth. If ecosystems collapse, so eventually will human civilization. One solution is inclusive green growth--the efficient use of natural resources. Its genius lies in working with nature rather than against it. Green Growth That Works is the first practical guide to bring together pragmatic finance and policy tools that can make investment in natural capital both attractive and commonplace. Pioneered by leading scholars from the Natural Capital Project, this valuable compendium of proven techniques can guide agencies and organizations eager to make green growth work anywhere in the world.