Skip to main content

Research Repository

Advanced Search

Public spending reallocations and economic growth across different income levels

Acosta-Ormaechea, Santiago; Morozumi, Atsuyoshi

Public spending reallocations and economic growth across different income levels Thumbnail


Santiago Acosta-Ormaechea


This paper examines the effects of public spending reallocations on economic growth. Assembling a disaggregated public spending dataset of 83 countries over the 1970-2011 period, we show that spending reallocations towards education, from health and social protection, have significant growth-promoting effects across a wide range of countries' income levels. However, income heterogeneity matters, particularly when reallocations involve infrastructure spending. Specifically, a reallocation from this spending to education also promotes growth, albeit primarily when the income level is low. This occurs because the effects of infrastructure spending are particularly weak in low-income countries, possibly due to the low quality of governance.


Acosta-Ormaechea, S., & Morozumi, A. (2017). Public spending reallocations and economic growth across different income levels. Economic Inquiry, 55(1), 98-114.

Journal Article Type Article
Acceptance Date May 17, 2016
Online Publication Date Aug 3, 2016
Publication Date Jan 1, 2017
Deposit Date Jul 19, 2016
Publicly Available Date Aug 3, 2016
Journal Economic Inquiry
Print ISSN 0095-2583
Electronic ISSN 1465-7295
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 55
Issue 1
Pages 98-114
Keywords Public spending reallocation; Economic growth; Education spending; Infrastructure spending; Income heterogeneity; Governance quality
Public URL
Publisher URL
Additional Information This is the peer reviewed version of the following article: Acosta-Ormaechea, S. and Morozumi, A. (2017), PUBLIC SPENDING REALLOCATIONS AND ECONOMIC GROWTH ACROSS DIFFERENT INCOME LEVELS. Economic Inquiry, 55: 98-114. doi:10.1111/ecin.12382, which has been published in final form at This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Contract Date Jul 19, 2016


You might also like

Downloadable Citations