Public finance, government spending and economic growth: the case of local governments in Brazil

Author: De Mello, Luiz R.

Source: Applied Economics, Volume 34, Number 15, 15 October 2002 , pp. 1871-1883(13)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

The impact of local government spending on output growth is estimated using a panel of Brazilian municipalities during 1985–1994. Attention is focused on three expenditure categories, housing/urbanization, health/sanitation, and transport services, which are expected to be growth-enhancing, and their sources of finance (local taxes, intergovernmental transfers, and borrowing). The determinants of these spending categories are also examined. The size of the municipality, measured by the resident population, is shown to affect government spending nonlinearly. This is a contribution to the recent empirical literature on the linkages between decentralized government spending, public finances, and economic growth at the local, rather than national, level.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840210128726

Publication date: October 15, 2002

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