The Allocation of Public Expenditure and Economic Growth

33 Pages Posted: 22 Jun 2011

See all articles by Pierre-Richard Agénor

Pierre-Richard Agénor

affiliation not provided to SSRN

Kyriakos C. Neanidis

University of Manchester - School of Social Sciences

Date Written: July 2011

Abstract

This paper studies the optimal allocation of government spending between health, education and infrastructure in an endogenous growth framework. Infrastructure affects not only the production of goods but also the supply of health and education services. The production of health (education) services depends also on the stock of human capital (health services). Transitional dynamics associated with budget‐neutral shifts in the composition of expenditure are analyzed, and growth‐ and welfare‐maximizing allocation rules are derived and compared. The discussion highlights the role played by the externalities associated with all three types of public services in the health and human capital technologies.

Suggested Citation

Agénor, Pierre-Richard and Neanidis, Kyriakos C., The Allocation of Public Expenditure and Economic Growth (July 2011). The Manchester School, Vol. 79, Issue 4, pp. 899-931, 2011. Available at SSRN: https://ssrn.com/abstract=1869539 or http://dx.doi.org/10.1111/j.1467-9957.2011.02197.x

Pierre-Richard Agénor

affiliation not provided to SSRN

No Address Available

Kyriakos C. Neanidis (Contact Author)

University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom
+44-161-275-4832 (Phone)
+44-161-275-4812 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
487
PlumX Metrics