Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 215:
The Role of Government in Capital Constrained Economies

Tove Strauss

Abstract: Is the role of government different in poor countries? We examine the government's role for growth in 40 LDCs with low infrastructure levels and limited access to capital. We consider both expenditure and financing aspects of government activity, but cannot conclude that governments in LDCs differ substantially from those with more efficient allocation mechanisms for private capital. However, we find that government consumption expenditure is a negative robust determinant of growth, emphasizing the importance of efficient allocation of government expenditure to reproductive investment. Although the debt-service ratio is not significant, increased public borrowing is a robust negative determinant of growth.

Keywords: Growth; developing countries; government; public investment; public debt; (follow links to similar papers)

JEL-Codes: C21; E62; H54; H63; O40; (follow links to similar papers)

36 pages, December 15, 1997

This working paper is replaced by no. 275

Download Statistics

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:hastef:0215 This page was generated on 2014-12-14 19:22:54