The unproductive public spendings are very common in developing economies, it builds a long run path for development but is there any literature or public policy available which indicates the tolerance level of inefficient public spending in short run?
Thanks in advance! :)
Paul: Here is a good article for you to read:
"The impact of productive and non-productive government expenditure on economic growth: an empirical analysis in high-income versus low- to middle-income economies"
- Tuan T. Chu
- Jens Hölscher
- Dermot McCarthy
05 December 2018
Link: Article The impact of productive and non-productive government expen...
If the public spending is unproductive, it is just unbearable.
To tackle the inefficiency issue, I wonder, efficiency for what? because efficiency must be determined according to objectives, goals and resources used. Remember that from a libertarian perspective, every public spending is inefficient, unproductive and unbearable in the long run.
Some benchmarks could help, using other countries experience and so on (like savings in public procurement, or social impact studies).
If the inefficient spending is directly linked to corruption, there is an interesting paper Preprint At what level of corruption does economic growth decrease?
. Curiously enough, the paper suggest that there is a level of corruption that actually " could have advantages for economic growth". That is similar to an argument by Ha-Joon Chang (in Bad Samaritans) were he stated that corruption, some times, works as an assignment mechanism (e.g. in the abscence of regulation).
Paul: Here is a good article for you to read:
"The impact of productive and non-productive government expenditure on economic growth: an empirical analysis in high-income versus low- to middle-income economies"
- Tuan T. Chu
- Jens Hölscher
- Dermot McCarthy
05 December 2018
Link: Article The impact of productive and non-productive government expen...
Non of it. And it is also happening in mid developed countries like Croatia.
Paul Stock thanks a lot for your comment, the article you have attached is really helpful.
- Badges
- Science topic
- Similar topics
- Biological Science
- Kinesiology
- Running