TAILIEUCHUNG - Optimal public expenditure in developing countries

In this present paper, the optimal public expenditure in developing countries is analyzed. Based on descriptive statistics and regression analysis of 30 developing countries in the period 2004-2013, the findings of this paper are threefold: (i) public expenditure increases along with the development level of countries; (ii) optimal public expenditure is at of GDP; (iii) economic growth has a positive relationship with both investment and the labor force, and a negative relationship with urbanization. | VNU Journal of Science Economics and Business Vol. 35 No. 2 2019 13-23 Original Article Optimal Public Expenditure in Developing Countries Hoang Khac Lich VNU University of Economics and Business 144Xuan Thuy Str. Cau Giay Dist. Hanoi Vietnam Received 20 June 2019 Revised 25 June 2019 Accepted 26 June 2019 Abstract Many researchers believe that government expenditure promotes economic growth at the first development stage. However as public expenditure becomes too large countries will suffer a huge tax burden and tax distortions. This suggests there is an optimal public expenditure at which the economic growth rate is the highest. However the optimal point would differ across countries because of differences in economic structure. In this present paper the optimal public expenditure in developing countries is analyzed. Based on descriptive statistics and regression analysis of 30 developing countries in the period 2004-2013 the findings of this paper are threefold i public expenditure increases along with the development level of countries ii optimal public expenditure is at of GDP iii economic growth has a positive relationship with both investment and the labor force and a negative relationship with urbanization. Keywords Public expenditure economic growth developing countries. 1. Introduction Public spending plays a special role in developing the economy society defense and security of a country. Governments use public expenditure for providing basic public goods and services infrastructure health care education and national defense . According to the IMF 2014 government size measured by government expenditure or tax revenue in most countries tends to increase in the long run and primarily arose for social security education Corresponding author. E-mail address hoangkhaclich@ https 2588-1108 13 and health care 1 . In developed economies government spending surpassed nominal GDP growth from the 1960s to the mid-1980s.

• Kinh tế học
• Public expenditure
• Economic growth
• Developing countries
• Optimal public expenditure
• National defense
• Public economics
• Lecture Public economics
• Public growth
• Public goods
• Government expenditure patterns
• Public finance
• Lecture Public finance
• Expenditure programs
• Expenditure programs for the poor
• Work incentives
• Summary of Doctoral thesis in Economics
• Summary of Doctoral thesis
• Impact of public expenditure
• Public expenditure on private investment
• Policy implications for Vietnam
• Direction of causality
• Public expenditure and GDP
• Granger Causality test
• Capital Expenditure to GDP
• Existence of Keynesian hypothesis
• Public good
• Public spending
• Public education
• Monitoring and evaluation
• Public governance
• Results based
• RBME evaluation system
• Public sector economics
• Federal government
• Political economy
• Median voter model
• Special interest
• Public economy
• Federal system
• Tiebout model
• The impact of the public
• Expenditure cuts policy
• The labor market
• The labor market in Vietnam
• The purp ose of this study
• Bayesian model averaging
• Explanatory variables included
• Economic theory
• Summary of PhD thesis
• Governance and economic growth
• Economic growth in developing countries
• Public health
• Smoking cessation
• Household expenditure
• Socioeconomic position
• Tools of positive analysis
• Positive analysis
• Empirical work
• Normative analysis
• Tools of normative analysis
• Welfare economics
• Nature of externalities
• Coase theorem
• Graphical analysis
• Cost benefit analysis
• Internal rate
• Benefit cost ratio
• Health care market
• Social insurance
• Risk pooling
• Moral hazard
• Market for health care
• Private health insurance
• Health insurance
• Social security
• Benefit structure
• Savings behavior
• Income redistribution
• Distributional dataissues
• Income inequality
• Income distribution
• Tax incidence
• Partial equilibrium models
• Tax on consumption bundle
• Excess burden
• Demand curves
• Equitable taxation
• Optimal commodity taxation
• The ramsey rule