Fiscal Policy and Economic Development

June 1, 2008

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Format: Chicago

Alex Mourmouras, and Peter Rangazas. Fiscal Policy and Economic Development, (USA: International Monetary Fund, 2008) accessed December 22, 2024

Disclaimer: 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

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/155
Stock No:

WPIEA2008155
ISBN:

9781451870138
ISSN:

1018-5941

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