ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Government Spending on Public Goods: Evidence on Growth and Poverty

Using panel data from 14 Indian states between 1990 and 2002, this paper empirically examines how the share of government spending on public goods such as health, education and basic infrastructure affects per capita gross domestic product growth and poverty reduction at the state level. Consistent with similar studies based on national-level data sets, the findings from this study show that the share of public goods expenditures in total government spending has a large, positive and significant impact on per capita gdp growth, and that the share of spending on social public goods such as education and health contributes significantly to poverty reduction. Especially, reallocation of expenditures to raise the share of public goods spending could on average increase per capita gdp growth rate by up to 2.7 percentage points, and reallocation of funds to increase the share of social public goods expenditures could on average reduce poverty headcount index by up to 6.6 percentage points.

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

826for India

$50for overseas users

Get instant access to the complete EPW archives

Subscribe now

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top