Abstract
This paper describes the empirical regularities relating fiscal policy variables, the level of development, and the rate of growth. We employ historical data, recent cross-section data and newly constructed public investment series. Our main findings are: (i) there is a strong association between the development level and the fiscal structure: poor countries rely heavily on international trade taxes, while income taxes are only important in developed economies; (ii) fiscal policy is influenced by the scale of the economy, measured by its population; (iii) investment in transport and communication is consistently correlated with growth; (iv) the effects of taxation are difficult to isolate empirically.
Original language | English (US) |
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Pages (from-to) | 417-458 |
Number of pages | 42 |
Journal | Journal of Monetary Economics |
Volume | 32 |
Issue number | 3 |
DOIs | |
State | Published - Dec 1993 |
Keywords
- Development
- Fiscal policy
- Growth
ASJC Scopus subject areas
- Finance
- Economics and Econometrics