SSE/EFI Working Paper Series in Economics and Finance
Growth and Government: Is there a Difference between Developed and Developing Countries?
Abstract: We examine the role of government for growth in 64
industrialized and developing countries, considering both expenditure and
financing aspects of government. Recognizing that there are differences
between the two country groups leading to severe heteroskedasticity, we use
weighted least squared estimations. The general conclusion is that the
means of financing matters more for growth than do government spending. We
find that seigniorage and budget surplus are important for growth in LDCs
but not in industrialized countries, while capital revenue matters only in
the latter group. Moreover, the level of indebtedness is a negative
determinant of growth in LDCs.
Keywords: Growth; government; public expenditure; public financing.; (follow links to similar papers)
JEL-Codes: C21; E62; H63; O40; (follow links to similar papers)
35 pages, October 23, 1998
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