Public spending and growth: The role of government accountability

Morozumi, Atsuyoshi; Viega, Francisco Jos�

Abstract

This paper examines the role of institutions in the nexus between public spending and economic growth. Empirical results based on a newly assembled dataset of 80 countries over the 1970-2010 period suggest that particularly when institutions prompt governments to be accountable to the general citizen does public capital spending promote growth. Taking account of the type of financing for this spending, we show that the growth promoting effect under an accountable government appears to prevail for various financing sources, including a reallocation from current spending, an increase in revenue, and a rise in the budget deficit. However, government accountability does not seem to play a key role in the growth effects of current spending.

Citation

Morozumi, A., & Viega, F. J. (2016). Public spending and growth: The role of government accountability. European Economic Review, 89, 148-171. https://doi.org/10.1016/j.euroecorev.2016.07.001

• Journal Article Type: Article
• Acceptance Date: Jul 1, 2016
• Online Publication Date: Jul 12, 2016
• Publication Date: 2016-10
• Deposit Date: Jul 18, 2016
• Publicly Available Date: Jul 18, 2016
• Journal: European Economic Review
• Print ISSN: 0014-2921
• Electronic ISSN: 1873-572X
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 89
• Pages: 148-171
• DOI: https://doi.org/10.1016/j.euroecorev.2016.07.001
• Keywords: Public spending; Economic growth; Institutions; Government accountability; Financing method
• Public URL: https://nottingham-repository.worktribe.com/output/801318
• Publisher URL: http://www.sciencedirect.com/science/article/pii/S0014292116301192
• Contract Date: Jul 18, 2016