The Quality of Growth: Fiscal Policies for Better Results

Lopez, Ramon, Vinod Thomas, Yan Wang. 2008. The Quality of Growth: Fiscal Policies for Better Results. IEG Working Paper 2008/6. The World Bank.

135 Pages Posted: 26 Jun 2017

See all articles by Ramón López

Ramón López

University of Maryland - Department of Agricultural & Resource Economics

Vinod Thomas

World Bank - Brazil

Yan Wang

Cornell University; African Development Bank

Date Written: August 2008

Abstract

This paper reviews recent empirical studies linking the nature of public expenditures and taxes with the quality aspects of growth – its impact on poverty, income distribution, and the environment. The studies reviewed confirm that more spending on public goods and concomitantly less spending in private goods (in good measure comprising non-social subsidies) are associated with growth that is faster and better for poverty reduction, income equality and environmental sustainability. Such an approach calls for a shift in government spending toward the provision of public goods, and away from subsidies for private goods that provide incentives for depletion of resources and concentration of income. The reallocation allows total government spending to be kept constant in order to ensure macroeconomic stability. This review is an initial effort to encourage deeper studies on how fiscal policies could improve both the quality and quantity dimensions of economic growth.

Keywords: the quality growth, fiscal policy, public spending, sustainability

JEL Classification: 000

Suggested Citation

López, Ramón and Thomas, Vinod and Wang, Yan, The Quality of Growth: Fiscal Policies for Better Results (August 2008). Lopez, Ramon, Vinod Thomas, Yan Wang. 2008. The Quality of Growth: Fiscal Policies for Better Results. IEG Working Paper 2008/6. The World Bank. . Available at SSRN: https://ssrn.com/abstract=2991375

Ramón López

University of Maryland - Department of Agricultural & Resource Economics ( email )

Symmons Hall, Rm 2200
University of Maryland
College Park, MD 20742-5535
United States
301-405-1281 (Phone)
301-405-9091 (Fax)

Vinod Thomas

World Bank - Brazil ( email )

1818 H Street NW
Washington, DC 20433
United States

Yan Wang (Contact Author)

Cornell University ( email )

Ithaca, NY 14853
United States

African Development Bank ( email )

Rue Joseph Anoma
Abidjan, Ivory Coast 01 BP 1387
Ivory Coast (Cote D'ivoire)

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